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market | IST

Nykaa IPO: First-mover advantage to help company grow 25% over next 5 years, says Elara Securities

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One of the most awaited IPOs, the largest multi-brand beauty and personal care (BPC) platform in India. Beauty and fashion retailer Nykaa receives an approval from market regulator SEBI for its IPO. It was of the most awaited IPOs, the largest multi-brand beauty and personal care (BPC) platform in India.

E-commerce beauty aggregator platform Nykaa filed preliminary papers with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) in August. Nykaa is looking to raise Rs 525 crore through a fresh issue of shares and an offer for sale of up to 43.1 million shares by existing shareholders and promoters.
The street is looking forward to the debut of the largest multi-brand beauty and personal care (BPC) platform in India. The Indian e-commerce industry offers huge potential and it is also hugely competitive. However, Nykaa has created a nice niche for itself and is one of the profitable e-commerce companies.
CNBC-TV18 spoke to Karan Taurani of Elara Securities to discuss the nitty-gritty of this upcoming IPO and he believes that the company has a first-mover advantage in the beauty and personal care segment, they are kind of trying to expand now in NykaaMan and like Nykaa Fashion space, but those are very small segments, as of now. Close to 90 percent of their revenue is you know, the core BPC offering.”
Nykaa has tie-up with multiple brands which offer luxury to mass usage products and are market-leaders in the segment.
"There are the players like Myntra, Amazon but if you look at Nykaa it is more premium in nature because they put exclusive contracts with many of the luxury brands and that is where they have an edge. Also, Nykaa has a very strong recall from a customer standpoint because the customers are very much assured that the product is not counterfeit in nature. That is one of the largest concerns in this category, where the products are so premium in nature,” Taurani added.
On Nykaa Fashion Taurani said, “The opportunity in fashion is very large. So, if you look at the BPC market, it is only Rs 9,000 crore market today, expect it to go to about Rs 20,000 crore. Nykaa stands to be at almost a 30 percent kind of market share there. The fashion market predominantly is very large that way in terms of size, it is about Rs 45,000 crore market expect to grow to Rs 90,000 crores over the next five years.
Watch accompanying video for more.