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Incorporated in 2012, Nykaa is a consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. The company has a diverse portfolio of beauty, personal care, and fashion products, including their own brand products manufactured by them. The company operates under 2 major verticals: Nykaa: Beauty and personal care and Nykaa Fashion: Apparel and accessories. They have a diverse portfolio of beauty, personal care and fashion products, including their owned brand products manufactured by them.

* As of March 31, 2021, Nykaa offered approximately 3.1 million SKUs from 4,078 national and international brands to their consumers across business verticals. For the 3 months ended June 30, 2021, the total GMV was ₹1,469.61 crore, which grew 238.8% from the 3 months ended June 30, 2020.

* The beauty and personal care offering is extensive with 256,149 SKUs from 2,644 brands primarily across make-up, skincare, haircare, bath and body, fragrance, grooming appliances, personal care, and health and wellness categories as of August 31, 2021

* The company manufactures owned brand beauty and personal care which are sold under their owned brands such as “Nykaa Cosmetics”, “Nykaa Naturals” and “Kay Beauty”.

* The company provides an omnichannel shopping experience to its customers by providing both online and offline shopping channels. Online channels include mobile apps, websites, and mobile sites while in the offline channel Nykaa opened their first physical store in 2014, and has 80 physical stores across 40 cities as of August 31, 2021. Their physical stores currently exist in 3 formats, Nykaa Luxe, Nykaa On Trend and Nykaa Kiosks.

Outlook & Valuation:

Nykaa redefined the art of e-retailing beauty and personal care in India. Nykaa's revenue for FY 2021 was at Rs 2,452 crore VS Rs 1,777 cr while profit for the year in the FY 2021 was Rs 61.9 cr, as compared to a restated loss of Rs 16.3 cr for 2020. Q1FY22 financials also looked better than previous years, but need to see how it grows further. The beauty and personal care market have a large market opportunity especially in India where millennials are more into buying brands and look for easy buying options such as e-commerce. At the upper price band of Rs 1125, the PE works out to be 839x and the price to sales comes at 21.6x to its FY21 earnings. The valuation of the IPO is pretty high however eyeing the higher valuations of other unicorns we may expect some listing gain. Thus, we assign a “SUBSCRIBE” rating to the IPO only for listing gains.

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