Falguni Nayar, founder and CEO of Nykaa. mint(Mint)
Falguni Nayar, founder and CEO of Nykaa. mint(Mint)

Nykaa selects 5 banks for share sale

  • The bankers are Kotak Mahindra Capital Co., Morgan Stanley, BofA Securities, Inc. (previously known as Bank of America Merrill Lynch), Bank of America Merrill Lynch, CitiBank and ICICI Securities
By Bruhadeeswaran R, Bengaluru
PUBLISHED ON APR 15, 2021 01:35 AM IST

Beauty and lifestyle company Nykaa has finalised five bankers for its initial public offering (IPO) that is expected to raise about $500 million ( 3,754 crore), two people aware of the matter told VCCircle.

The bankers are Kotak Mahindra Capital Co., Morgan Stanley, BofA Securities, Inc. (previously known as Bank of America Merrill Lynch), Bank of America Merrill Lynch, CitiBank and ICICI Securities, the people said on condition of anonymity. A Bloomberg report on Tuesday identified Kotak Mahindra Capital Co. and Morgan Stanley as bankers to the IPO that is likely to value the company at $4 billion.

Mumbai-based Nykaa joins other e-commerce leaders preparing for public markets, such as Flipkart, Zomato and Pepperfry. CitiBank and ICICI Securities declined comment while rest of the banks and the cosmetics firm didn’t respond to queries till press time.

The development comes after Nykaa said earlier this week it has acquired jewellery e-tailer Pipa Bella for an undisclosed amount. The purchase was made through fashion and accessories retail arm, Nykaa Fashion.

Previously, to expand its fashion business, Nykaa had acquired women styling platform 20Dresses.com for an undisclosed sum in 2019.

Early last month, The Economic Times reported that Nykaa was in talks to do a $50-150 million (around Rs.365-1,095 crore) secondary round to realign its cap table before the IPO, offering some early backers exits to make way for new investors. This round is expected to value the omnichannel firm at $2 billion, the report added.

The cosmetics company entered the unicorn club in May 2020 with a reported valuation of $1.2 billion, when it raised Rs.66.6 crore from existing investor Steadview Capital.

The next month, VCCircle reported how Nykaa is turning out to be a goldmine for KKR co-founder Henry Kravis and many others, including some that have ties with the private equity firm.

After a few quarters, the firm raised an undisclosed amount in a bridge round from Boston-based asset manager Fidelity Investments Inc. in November at a valuation of a little over $1.8 billion.

Nykaa was set up in 2012 by investment banker-turned-entrepreneur Falguni Nayar, who was a managing director at Kotak Mahindra Capital. It sells products for women and men in categories including skincare, hair care, fragrances, bath and body, and luxury products.

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