Lifestyle retailer Nykaa is expected to be the first profitable startup business to put its initial public offering (IPO) plans on the fast track. The company is expected to file a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) within the next few days.
The firm has already converted into a public entity after its stakeholders passed a special resolution to change the status. Nykaa now goes by the name of FSN e-commerce Ventures Ltd.
According to sources, Nykaa is eyeing a valuation of $4-5 billion in the proposed issue. However, the final number depends on market conditions, investor appetite, and global peer comparison.
The offering, largely a secondary sale of shares, will see investors like TPG, Steadview Capital, Fidelity, and Hero Group's Kant Munjal selling their shares.
The company is profitable, sources said and does not need cash to grow, thus a small portion of the IPO issuance is expected to be primary.
Post-listing, Falguni Nayar and family will own a controlling stake of over 51 percent, sources said. Nayar is a former investment banker and the founder and CEO of the company.
Nykaa logs approximately 55 million monthly visits and has over 1,200 brands registered, ranging from makeup to health supplements to skincare products. It has six warehouses in the country and receives over 13 million orders every month.