NYKAA - PreIPO Notes
Talking and commenting about their Business, Financials & Future Growth Prospects.
Hello Everyone! I hope you had a great Sunday.
In this Newsletter we will be understanding all the insights and reviewing the data of a well-known lifestyle brand and a company - NYKAA. We will be focusing on -
What’s the company is all about?
What’s their exact business?
How do they operate it?
How & how much do they earn from it?
What are their Future Growth Triggers?
Let’s Crack it!
NYKAA is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. Incoporated in 2012. Have a diverse portfolio of beauty, personal care and fashion products, including their owned brand products manufactured by themselves.
They have both Online & Offline style of operating their business.
Online - Online channels include mobile applications, websites and mobile sites. As of March 31, 2021, they had cumulative downloads of 43.7 million across all of their mobile applications and during the Financial Year 2021, 86.7% of their online GMV(Gross Merchandise Value) came through their mobile applications. According to the RedSeer Report, they have one of the highest share of mobile application-led transactions, among the leading online retail platforms in India during Financial Year 2021.
Offline - Their offline channel comprises 73 physical stores in 38 cities of India across three formats Nykaa Luxe, Nykaa On-Trend, & Nykaa Kiosks.
They have 2 entirely separate verticals -
Nykaa: Completely designed and curated for Beauty and Personal care products.
Nykaa Fashion: Designed for Apparel and accessories. Launched in 2018.
As of March 31, 2021, they have offered approximately 2.0 million SKUs from 3,826 national and international brands across business verticals.
NYKAA’s Consumer Journey -
The above image shows nice and consistent rise in new customers. Also it shows degrowth in existing customers. This must have hampered recurring orders from the existing customers.
Nykaa Prive, consumer loyalty program for beauty and personal care vertical, members enjoy exclusive offers and discounts, complimentary gifts, free shipping and access to exclusive members’ only content. The Prive members also enjoy priority access to consumer service team. As of March 31, 2021, there were 2.1 million Nykaa Prive members. Consumers can also earn Nykaa reward points by signing up, shopping, writing reviews and answers and referring new consumers to the platform. These rewards points can be redeemed to make purchases from the platform.
They had a network of 1,363 influencers, including Generation Z trend setters, mommy bloggers, beauty, fashion and lifestyle bloggers, makeup artists and celebrities under Nykaa Affiliate Program.
Nykaa TV, Youtube channel have 1.1 million subscribers with watch time of 1.3 million hours. Overall, 12.6 million followers across leading social media platforms as of March 31, 2021.
Its a family owned and managed business.Falguni Nayar and Sanjay Nayar are spouses; Anchit Nayar and Adwaita Nayar are siblings; and Falguni Nayar and Sanjay Nayar are the parents of Anchit Nayar and Adwaita Nayar.
Financial Numbers -
Parameters FY19 FY 20 FY 21 (in millions)
Income 11164 17779 24527
Expenses. 11481 17903 23773
Profit/Loss - 317 -124 +745
Numbers of orders and Gross Merchandise Value -
Average order value -
Customer acquisition cost (spends on marketing, advertising, and other )
Fulfilment Costs -
Borrowings of the Company on consolidated basis As of July 19, 2021, Company and its Subsidiaries had total borrowings (long term borrowings (including current maturity of long-term debt) and short-term borrowings) amounting to ₹ 3,462.84 million.
It’s a 5250 millions offer for sale where existing promoters and investors are looking to sell some of their stake.
On Future growth prospects company is focused on increasing customer base, high AOV.
My Remarks -
Company in a business of low margins but high volumes. Company has just turned into profit. Expenses looks in control. Being a platform business they have offline stores which benefits them nicely. Their expenses on customer acquisition are now decreasing which also helps them in profit margins. Overall a great business and a okay company. It will be crucial for them to perform consistently from here on and stay is profit. Most platform business are failing to stay in profit like UBER etc.
The Nykaa IPO open date is Oct 28, 2021, and the close date is Nov 1, 2021. The issue may list on Nov 11, 2021.
The Nykaa IPO market lot size is 12 shares. A retail-individual investor can apply for up to 14 lots (168 shares or ₹189,000).
IPO Price ₹1085 to ₹1125 per equity share.
That’s it from my side guys.
See you on the next one!
Adios!