Falguni Nayar built Nykaa to stand out from the crowd
Nykaa, in its early years, was funded entirely by Falguni Nayar and her husband Sanjay Nayar, the chairman of private equity major KKR & Co. in India. The focus was on building an inventory-led business, as she said in a 2017 interview to The Economic Times. “The company ran on family funds for two years because I didn't want to raise money. I wanted to make the metrics happen,” Nayar had said then. “We had good momentum by the time I went to investors. We had access, since my husband and I were both bankers.”In the process, she has become the wealthiest self-made woman in India, is among the country's 20 richest people, and worth more than her peers who have either listed their startups or are in the process of doing so.
(All of these people are men, save for Savitri Jindal—the richest woman in India—and Mobikwik cofounder Upasana Taku.)The company turned unicorn only in March 2020, after just five rounds of funding—of which only three involved institutional investors. Nykaa is also profitable—a rarity among Indian startups.
Building Nykaa
For any business, the first year is a honeymoon period—it is easy because you are just designing. The next year, when business starts scaling up, is crucial, Nayar said in the 2017 interview. “The person heading operations couldn't cope with 30 orders a day and quit. We had to learn how to dispatch packages and set up an enterprise resource planning system,” she had said then.
Today, Nykaa is among the few profitable etailers in India. It reported a net profit of Rs 61.96 crore in the fiscal ended March 31, compared to a net loss of Rs 16.34 crore in the year-ago period. Revenue grew 38% year-on-year to Rs 2,453 crore in FY21.
IPO and listing
FSN E-Commerce Ventures, the parent company of India's biggest cosmetics etailer Nykaa, launched its IPO on October 28 to raise as much as Rs 5,352 crore by offering shares in a price band of Rs 1,085-1,125 apiece. The issue was subscribed nearly 82 times.
On Wednesday, Nykaa listed at nearly 80% premium and ended the day 96.15% higher than its issue price at Rs 2,206.70—that translates to a market capitalisation of Rs 1,04,360.85 crore on day one. The Nayar family’s net worth is more than half of that.
“I started Nykaa at the age of 50 with no experience. I hope the Nykaa journey can inspire each of you to be the Nykaa (heroine) of your lives,” Nayar said at the opening bell
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