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59% Buy 👍 Sector logoe-Commerce
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Shareholding Info
  • Promoters
    52.26 %
  • Foreign institutions-FII
    9.84 %
  • Other domestic institutions
    3.69 %
  • Retail and other
    23.6 %
  • Mutual Funds
    10.62 %

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About Nykaa


FSN E-Commerce Ventures Limited (Nykaa) is an Indian e-commerce company, engaged in the business of manufacturing, distributing and selling beauty, wellness and fashion products. It was founded by Falguni Nayar, former managing director at Kotak Mahindra Capital Company, in 2012 and headquartered in Mumbai, and sells an array of products that are manufactured in India and globally. In 2015, the store grew from an online-only presence to an omnichannel model, and today, it is present across websites, mobile apps and over 100 offline stores. The brand includes three kinds of retail stores, namely, Nykaa Luxe, Nykaa OnTrend and Nykaa Kiosk and brands called Nykd, Nykaa Naturals, Pipa Bella, Nykaa Cosmetics, Kay Beauty and Twenty Dresses. Its subsidiaries include Nykaa Fashion Limited, Nykaa E-Retail Private Limited and FSN Brands Marketing Private Limited.

Core Activities & Products


An Indian e-commerce company, Nykaa, along with its subsidiaries, is in the business of manufacturing, distributing and selling beauty, wellness and fashion products. It brings to the public domestic and international brands, including luxury, basic, premium, niche and cult brands, including videos from experts giving advice on wellness and beauty. The company offers over 2400, 100% authentic brands including a well curated and wide range of makeup, bath and body, fragrance, skincare, haircare, grooming appliances, personal care, and health and wellness categories.

Board of Directors

  1. Falguni Nayar - Founder CEO
  2. Adwaita Nayar - CEO, Nykaa Fashion
  3. Anchit Nayar - CEO, Nykaa.com
  4. Nihir Parikh - CEO, Nykaa Man
  5. Arvind Agarwal - Chief Financial Officer
  6. Sanjay Suri - Chief Technology Officer
  7. Manoj Jaiswal - VP, Operations and Chief Supply Chain Officer

Presence


Nykaa has eight offices situated across Mumbai and Delhi, and has a retail presence across India.

Registered Office:


104, Vasan Udyog Bhavan,
Sun Mill Compound, S.B.Marg,
Tulsi Pipe Road,
Lower Parel,
Mumbai 400013, India 

Strengths:


The strengths of the company that have affected the Nykaa share price are:
  1. Wide Social Media Presence: Nykaa social media and marketing strategy is supported by its regular digital campaigns, contests like Nykaa Beauty Femina Awards, brand endorsements, web series, presence in magazines etc. which attracts many potential customers.
  2. Affordability: The company presents its consumers with a wide range of products, from affordable to luxe items, in all categories, keeping in mind the needs of people from all financial backgrounds, and thereby, increasing their customer base.
  3. Variety of Products: It has a wide variety of products available in its online and offline stores to prevent customers from migrating to other similar stores.
  4. Innovation: Nykaa is always introducing new and innovative products and offerings to keep the attention of customers and to meet their ever-changing demands.
  5. Geographical Presence: The company is present across India, making its geographic presence one of its greatest strengths. It helps determine the reach of the company and ensures easy accessibility.
  6. Less Charging Suppliers: The enterprise has access to suppliers that provide raw materials at low costs, hereby, boosting the efficiency of the business.
  7. Property Rights: Its several intellectual property rights makes its product offering unique and exclusive, proving hard for competitors to copy.

CSR and Sustainability


Nykaa has been involved in several CSR activities. During the COVID-19 pandemic, the company, in collaboration with the PM Cares Fund, encouraged customers to donate for the fight against the virus and matched the amount donated by its customers. It also contributed to the 'Give India Foundation' for medical equipment supply to hospitals in Maharashtra. The company also worked with the Planning Rural-Urban Development through Education (P.R.I.D.E India), by contributing towards their Joy of Giving Week campaign to provide the essential home salon training skills to women and girls in the Raigad district of Maharashtra, and towards the upliftment of marginalised communities living in poverty. For Women’s Day, Nykaa joined hands with the Society for Nutrition, Education and Health Action (SNEHA), which focuses on empowering women through maternal healthcare, child nutrition and prevention against domestic violence.

Criticism


Environmentalists have criticised Nykaa for not integrating sustainability into its operations and practising poor waste management. The company also contributes very little towards research and development activities, which could lead to a lack of knowledge about the market. This may weaken its performance. Another weakness of Nykaa are the costly delays in introducing new concepts or products it has to bear due to a slow decision-making process..

COVID-19 Impact


FSN E-Commerce Ventures Ltd. was adversely impacted by the COVID-19 pandemic and had to suspend their operations and temporarily shut down their retail stores, corporate offices and warehouses across India during the lockdown in March 2020. After resuming services, the company recorded a 57% decline in consolidated profit after tax to Rs. 29 crore in the third quarter ended December 31, 2021. This was majorly attributed to its more than 2x increase in its marketing expense to acquire customers. However, the company's gross margins increased from 41.8% to 46.3% a year, in the December 2021 quarter. As the pandemic situation has improved, it is already on the road to recovery.

Future Prospects


As per industry experts, the reach of Nykaa has been growing exponentially, and is expected to attract many new customers. Its social media presence and the emergence of e-commerce can prove to be a great opportunity for the company. Moreover, its business model is expanding to increase its reach to the international market and boost profits. The company can also avail the subsidies and other measures provided by the Indian government to make their business more sustainable. As the pandemic situation is improving and economic recovery is underway, the consumption of consumer goods and services are also likely to increase, which may push sales. The development of new technology can also help reduce costs, increase efficient and newer products for Nykaa. However, there are also some factors which may hinder growth. The introduction of stricter e-commerce regulations and ever-changing legal framework are a drawback for the business. Owing to the popularity of e-commerce and social media, the company is also facing a rise in the number of competitors, impacting its ability to retain and expand their market size. Finally, organic and cruelty-free products are gaining more and more popularity, posing a threat to Nykaa.

Did You Know!


In 2020, Nykaa became the first woman-lead unicorn startup in the country, and has continued to grow since. It is India’s largest omnichannel beauty destination, and among the biggest platforms that provides for all beauty, wellness and fashion needs of customers. The company also got featured in the prestigious annual TIME100 Most Influential Companies List 2022. It has also recently agreed to acquire Little Black Book - a digital lifestyle, content-led shopping platform.

Initial Public Offering


A main-boardIPOof equity shares, the Nykaa IPO opened on 28 October, 2021, and closed on 01 November, 2021. Link Intime India Private Ltd was the registrar for the IPO, and the shares were listed on BSE and NSE. The IPO consisted of equity shares aggregating up to Rs. 630 crore. It also had an offer for sale of up to 41,972,660 equity shares by existing shareholders or promoters. The IPO was subscribed 81.78 times on 01 November, the last day. As compared to its IPO issue price, Nykaa share price was trading at a premium of more than 82% at Rs. 2,054 per share on the NSE, and closed over 10% higher at Rs. 2,208 per share on its first day on the BSE.

Equity Shares


As compared to the newly-listed new-age companies, Nykaa is the only one to record profits, and has never gone below its issue price of Rs. 1,125. As per industry and stock market experts, the concept of the enterprise's business model is a monopoly and acquisition will become tough in light of the rising interest rates - leading to a decline in the short to medium term. According to JM Financial, the FSN E-Commerce Ventures Limited is listed under ‘buy’ with a target price of Rs. 1730, indicating a good rise in the counter. While it acknowledges the short-term risk, the firm believes that it will prove profitable in the medium-long term.

Annual Financial Summary


BALANCE SHEET OF FSN E-COMMERCE VENTURES NYKAA (in Rs. Cr.)

MAR 22

MAR 21

MAR 20

12 mths

12 mths

12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital

47.41

15.06

14.55

TOTAL SHARE CAPITAL

47.41

15.06

14.55

Reserves and Surplus

1,502.47

545.76

404.12

TOTAL RESERVES AND SURPLUS

1,502.47

545.76

404.12

TOTAL SHAREHOLDERS FUNDS

1,549.88

560.82

418.67

NON-CURRENT LIABILITIES

Long Term Borrowings

0.00

0.00

0.15

Deferred Tax Liabilities [Net]

0.00

0.00

0.00

Other Long Term Liabilities

38.97

16.25

5.19

Long Term Provisions

1.24

0.94

0.92

TOTAL NON-CURRENT LIABILITIES

40.21

17.19

6.26

CURRENT LIABILITIES

Short Term Borrowings

31.33

24.35

34.63

Trade Payables

16.62

11.39

17.35

Other Current Liabilities

50.68

30.83

20.94

Short Term Provisions

1.66

1.72

0.01

TOTAL CURRENT LIABILITIES

100.28

68.30

72.94

TOTAL CAPITAL AND LIABILITIES

1,690.44

646.64

498.07

ASSETS

NON-CURRENT ASSETS

Tangible Assets

15.53

11.64

13.09

Intangible Assets

0.93

1.26

4.41

Capital Work-In-Progress

0.00

0.00

0.00

Other Assets

0.00

0.00

0.00

FIXED ASSETS

16.46

12.90

18.18

Non-Current Investments

379.48

69.58

52.49

Deferred Tax Assets [Net]

7.45

19.82

27.77

Long Term Loans And Advances

301.98

210.03

134.48

Other Non-Current Assets

33.56

19.42

4.49

TOTAL NON-CURRENT ASSETS

738.93

331.75

237.42

CURRENT ASSETS

Current Investments

0.00

0.00

0.00

Inventories

72.55

33.22

46.34

Trade Receivables

24.22

63.72

25.51

Cash And Cash Equivalents

220.33

192.30

169.18

Short Term Loans And Advances

206.08

0.09

0.58

OtherCurrentAssets

428.35

25.56

19.04

TOTAL CURRENT ASSETS

951.51

314.89

260.66

TOTAL ASSETS

1,690.44

646.64

498.07

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities

407.18

446.74

312.00

CIF VALUE OF IMPORTS

Raw Materials

0.00

0.00

0.00

Stores, Spares And Loose Tools

0.00

0.00

0.00

Trade/Other Goods

0.00

0.00

0.00

Capital Goods

0.00

0.00

0.00

EXPENDITURE IN FOREIGN EXCHANGE

Expenditure In Foreign Currency

27.17

0.85

0.00

REMITTANCES IN FOREIGN CURRENCIES FOR DIVIDENDS

Dividend Remittance In Foreign Currency

--

--

--

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods

--

--

--

Other Earnings

1.57

--

--

BONUS DETAILS

Bonus Equity Share Capital

31.14

--

--

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value

--

--

--

Non-Current Investments Unquoted Book Value

379.48

69.58

52.49

CURRENT INVESTMENTS

Current Investments Quoted Market Value

--

--

--

Current Investments Unquoted Book Value

--

--

--

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