E-commerce beauty aggregator platform Nykaa had submitted preliminary documents for initial public offer (IPO) with Sebi in August. Nykaa plans to raise Rs 525 crore through this IPO by issuing fresh shares and selling 4.31 crore shares of existing shareholders and promoters.
Nykaa is the country’s largest multi-brand beauty and personal care (BPC) platform. In such a situation, Dalal Street is also eagerly waiting for its IPO. The Indian e-commerce industry has a lot of competition with a lot of possibilities open to it. However, Nykaa has carved a niche for itself in this sector and is one of the few profitable e-commerce companies in the country.
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Our partner channel CNBC-TV18 spoke to Karan Taurani of Elara Securities to discuss the specifics of Nykaa’s IPO. Karan believes that the company is one of the first to enter the beauty and personal care segment, which has benefited him. Apart from this they are now trying to expand with segments like NykaaMan and Nykaa Fashion. However, these are still very small segments and around 90 per cent of the company’s revenue comes from the BPC segment itself.
Nykaa has tied up with several brands that provide luxury products to the masses and is a market leader in this segment.
Karan said, “In ecommerce there are brands like Myntra and Amazon. But if you look at Nykaa, it is much more premium than these. The reason behind this is that it has exclusive contracts with many luxury brands and this is the place. Where it has an edge. Also, Nykaa has a very good recall rate from many customers as it gives customer satisfaction that its product is not counterfeit. This is one of the biggest concerns of the premium category product segment. “
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On Nykaa Fashion, Karan said, “The opportunities in the fashion segment are huge. If you look at the BPC market, it is a market of only Rs 9,000 crores today and it is expected to go up to around Rs 20,000 crores. Nykaa has a lot in this segment. 30% market share. Although the fashion market is a much bigger market in terms of size. Today it is a market of around Rs 45,000 crore which is expected to grow to Rs 90,000 crore in the next five years.”
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