According to sources, Nykaa is preparing to file for an initial public offering that could value the startup at more than $4 billion. The country’s top e-commerce company for beauty, founded by Falguni Nayar, is aiming to file its draft red herring prospectus, or DRHP, within the next few days. It plans to sell just more than 10% of the equity, one of the people said, which could raise $400 million or more.
India’s technology industry has turned white hot this year, with startups raising record amounts of venture capital and a flurry of initial public offerings. The food-delivery app Zomato Ltd. became the nation’s first unicorn to make its stock-market debut this month, raising $1.3 billion. Its shares have soared more than 75%, giving the money-losing business a valuation of $14 billion.
Nykaa, founded in 2012 by former investment banker Nayar, has grown into India’s top destination for beauty products with its own chain of physical outlets and 18.5 billion rupees ($250 million) in revenue in fiscal 2020. Its investors include TPG and Fidelity.
Like with any IPO however, the final price will be set through a process of discussions with investment bankers and potential investors. Any valuation could still change and market conditions could also play into the calculations.