Nykaa IPO: Will It Translate the Beauty and Personal Care Market Opportunity into Big Profits?

Case Code: FINC200
Case Length: 11 Pages
Period: 2019-21
Pub Date: 2023
Teaching Note: Available

Price: Rs.300
Organization: Nykaa E-Retail Private Limited
Industry: Cosmetics & Toiletries
Countries: India
Themes: Corporate Finance, E-commerce

Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

Nykaa IPO

Despite the abundance of capital in the private market, Nykaa decided to go public to build itself into a more sustainable organization. “We are looking at building a more sustainable organisation and offering a window of opportunity to our existing shareholders to exit. Going public was the better option,” Nayar said. After impressing women users (?) through its makeup and skincare online delivery in the country, Nykaa was all set to go public and woo the stock-market investors..

Subscribe to the IPO or Not?

In 2019, the size of the BPC market in India was Rs.1,267 billion, which fell to Rs.1,120 billion in 2020 due to reduced spending during the pandemic. Nykaa had a considerable BPC market opportunity of Rs.1,120 billion, which was expected to grow at 12% per annum to reach Rs.1,981 billion in 2025..

Way Forward

The increasing number of Nykaa consumers and transactions would create a possibility for more brands and more sellers to be associated with the company, further increasing the choice for customers, analysts said. They expected the company to continue adding more lifestyle verticals and adjacencies on its platform by leveraging on its brand strength, which would further increase its consumer base..

Exhibits

Exhibit I: Peer Comparison with Non-listed Online BPC Players in India
Exhibit II: Nykaa’s Consolidated GMV
Exhibit III: Nykaa IPO Details
Exhibit IV: Objectives of Nykaa IPO
Exhibit V: The Financials of Nykaa

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