Nykaa will spend its IPO money on setting up retail stores and repaying loans
Canva/ BI India
- Nykaa IPO would consist of a fresh issue of equity shares worth ₹525 crore and a secondary issue of 4.3 crore equity shares.
- The total issue size will reportedly be ₹4,000 crore.
- A total of 17 investors will be shelling out a part of their shareholdings with Nykaa’s public issue.
- The company plans to expand its retail presence to boost organic growth and retention.
AdvertisementNine-year old fashion and beauty e-commerce platform Nykaa has got the wheels rolling for its initial public offering (IPO), with the filing of draft red herring prospectus (DRHP) last night.
The Mumbai-based company — founded by the 55-year old Falguni Nayyar who has a net worth of ₹5,410 crore ($728 million), according to Forbes — has not yet publicly revealed the size of the IPO. However, a Moneycontrol reported, citing sources, that Nykaa aims to raise ₹4,000 crore through this issue.
The IPO would consist of a fresh issue of equity shares worth ₹525 crore and existing investors in the company — whose last reported valuation was $1.2 billion — will sell part of their stakes amounting to 4.3 crore equity shares.
Nykaa, in its DRHP, has revealed that the net processed would be used for five purposes.
*The amount utilised for general corporate purposes shall not exceed 25% of the Net Proceeds
|Particulars||Amount from net proceeds||Total investment to be made|
|Investment in subsidiaries like FSN Brands or Nykaa Fashion to set up retail stores||₹35 crore||₹53.9 crore|
|Capital expenditure incurred by the company and fund setting up on new warehouses||₹35 crore||₹92.4 crore|
|Repayment of outstanding borrowing||₹130 crore||N./A|
|Expenditure on enhancing brand visibility and awareness||₹200 crore||₹200 crore|
|General corporate purpose*||N/A||N/A|
Nykaa plans to set up new retail stores, with an built-up area of approximately 75,000 square feet, over the next three financial years.
It had over 73 physical stores and 18 warehouses, as of March 31, 2021.
The company has loans to repay to the tune of ₹187.4 crore from HDFC Bank, Kotak Mahindra Bank, Axis Bank and IDFC First Bank.
A total of 17 investors — both institutional and individual — will be shelling out a part of their shareholdings with Nykaa’s public issue.
|Sanjay Nayar Family Trust*||Up to 4,800,000|
|TPG Growth IV SF Pte. Ltd||Up to 5,421,510|
|Lighthouse India Fund III, Limited||Up to 4,844,620|
|Lighthouse India III Employee Trust||Up to 51,530|
|Yogesh Agencies & Investments Private Limited||Up to 2,538,450|
|J M Financial and Investment Consultancy Services Private Limited||Up to 914,000|
Kotak Investment Banking, Morgan Stanley, Bank of America Securities (BofA), Citigroup Global Markets India, ICICI Securities and JM Financial are the lead book running managers for this IPO. Link Intime is the registrar of the offer.
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