Falguni Nayar had a self-imposed deadline of owning a business at 50. Thus, Nykaa was born in 2012.
Nykaa’s founder was scared to take the entrepreneurial plunge in 2012 as ‘everything was going right’ in Kotak Mahindra where she spent almost 19 years in various positions. But she had a self-imposed deadline of owning a business at 50. Hence in 2012, Nykaa was born.
A decade later, she has listed her startup at a valuation higher than some of the largest legacy businesses in India.
Falguni Nayar joined the rare ranks of self-made billionaire women this week as her beauty startup went public and doubled on its trading debut. She runs the FSN E-Commerce Venture that raised 53.5 billion rupees in its initial public offering, whose share rose almost 96% on the first day of trading.
That made Mrs Nayar, who owns about a 51% stake in the company worth around $7 billion, as per the Bloomberg Billionaires Index. She is India’s wealthiest self-made female billionaire. She becomes a billionaire after Kiran Mazumdar Shaw and Savitri Jindal, chairman of OP Jindal Group.
According to Forbes India Rich List, Nayar is now wealthier than the Muthoot family of the Muthoot Finance, Marico’s Chairman Harsh Mariwala and Asian Paints’ Abhay Vakil.
The story behind Nykaa
Nykaa started with 60 daily orders and did not think of slashing prices. “We would rather sell the right colour of lipstick at full price than the wrong shade at half off, which would make the buyer unhappy within minutes of wearing,” Nayar told Bloomberg.
Today, the online beauty business is a profitable startup, a rarity in India. The company reported 38% on year revenue growth to 2,453 crore rupees for the fiscal year 2021. It swung to a profit of 61.96 crore rupees in the same period from the year-ago loss of 16.34 crore rupees.
It is the Tier II and III cities driving post-pandemic growth in India and for Nykaa. As per the company statement, Tier II and III cities contributed 64% of revenue in FY21 compared to 59% in FY20. They have also opened about 70 stores across 30 cities.
Nykaa has now ventured into the Fashion business that contributes almost 20% of their business. They have also dived into launching their own brands whose sales revenue is comparatively small till now. Nykaa’s gross merchandise value soared over more than 50% to almost 4,046 crore rupees in the year ending on March 31.
The inevitable IPO
Falguni Nayar’s FSN E-Commerce Ventures, the parent company of the country’s largest cosmetics e-tailer Nykaa, launched its IPO on October 28. They have raised as much as 5,352 crore rupees by offering shares between 1,085 rupees-1,125 rupees per piece. The issue was subscribed nearly 82 times.
Debutante Nykaa was listed at nearly 80% premium and ended the day 96.15% higher than its issue price at Rs 2,206.70 on Wednesday. It translated to a market capitalisation of 1,04,360.85 crore rupees on the first day itself. Falguni and her family’s net worth is more than half of that.
In the opening bell, Falguni said that she started the company without any prior experience and hoped that the journey can inspire others to become proud startup owners.