The share price of beauty products business Nykaa almost doubled upon listing on Wednesday. Co-founder Falguni Nayar and her family’s stake is now worth over $6.5 billion, making her one of the richest female entrepreneurs in India. Mint looks at her journey.
The share price of beauty products business Nykaa almost doubled upon listing on Wednesday. Co-founder Falguni Nayar and her family’s stake is now worth over $6.5 billion, making her one of the richest female entrepreneurs in India. Mint looks at her journey.
Who is Falguni Nayar?
A graduate of IIM Ahmedabad, Nayar worked with management consulting firm AF Ferguson and Co. before joining Kotak Mahindra Capital Co. Ltd. Inspired by her businessman father, Nayar set herself a deadline of starting a business by the age of 50. Indeed, she launched Nykaa at 50 in 2012. She had no experience in retail, technology, beauty or fashion, but is risk-taking by nature. In 2017, she told Mint that she always thought of herself as adventurous and someone who jumped first even if she was not a swimmer, not caring if she broke a leg.
What was Nayar’s big idea?
Nayar picked the beauty and wellness segment for her business venture. In 2012, customers were wary of buying beauty products online because of counterfeit products. So, Nayar and her team curated beauty products, sourcing high-end luxury items directly from manufacturers to sell online. During its initial days, the company got only 20 odd orders a day. Today, Nykaa receives around 70,000 orders a day and its mobile app has seen over 55 million downloads. Around 70% of the gross merchandise value is from repeat customers.
How did she expand the business?
Nayar and her team launched physical stores across the country. After beauty products, the company expanded into fashion two years ago. ‘Nykaa Man’ sells personal care products for men. The company also plans to adapt to retailing via video and live commerce, social commerce and use artificial intelligence for virtual try-ons and personalization.
How much equity did she hold?
Nayar and her family owned 54.25% stake in Nykaa before the IPO, via four family trusts–Sanjay Nayar Family Trust, Falguni Nayar Family Trust, Adwaita Nayar Family Trust, and Anchit Nayar Family Trust. Sanjay (Falguni’s husband) and she are listed as trustees of all the four family trusts in the company’s initial public offering (IPO) paperwork. Adwaita and Anchit, her twin children, also owned shares independently. The Sanjay Nayar Family Trust sold 4.8 million shares in the IPO, out of its 120 million shares.
How did she strike gold?
Nayar has said relentless focus on execution, curation of content, and beauty products has helped Nykaa achieve scale. Being financially frugal was key, as was her focus on tech in 2012 when she started out. The company raised only around $100 million in primary capital till the IPO and is profitable. The effort paid off as the company’s IPO received over 4.4 trillion bids, the second highest for any IPO. On Wednesday, the shares hit 2,208.35 apiece, with a market cap of over $13.5 billion.
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