Hi, this is the editor speaking (or is it talking? I don’t know and let’s not delve into pointless technicalities). How things work at Twister Bob is that research team dumps on me the weekly financial data with the directive of making it ‘readable and relatable for the readers.’ There’s only so much Fin. Wizard language that can be translated into muddle blood English. Happy reading!
With a flurry of star-studded IPOs in Q1 2021, India ranks 9th in the world markets in terms of number of IPOs being floated. In comparison to Q1 2020, there has been a 16x growth in IPOs in Q1 2021 which is also 70% more compared to the last quarter of 2020. If this tenfold increase in IPOs wasn’t enough to blow the minds, the total fund raised through these deals is close to a staggering 2.5 billion dollars in Q1 2021 and approx 2.3 billion dollars in Q2 2021.
With 2 quarters of 2021 behind us, let’sr take stock of the developments on the IPO front in the country. As of 8th August, 2021, 6 IPO deals have been finalized with an estimated fund raised approx 2 billion dollars. A month and 2 billion dollars into the quarter, we are still witnessing a plethora of companies filing their DRHP (Draft Red Herring Prospectus), which bring us to our main act – Nyka. Which plans to raise 4000 crore INR through its IPO.
Incase you’re not aware of Nyka (and if this is actually the case, I’m inferring that you either lack a girlfriend or live under a rock). Nyka is an omni-channel consumer tech platform with a diverse portfolio of beauty, personal care, and fashion products. I insisted that the team should explain what Nyka does and they copied and pasted their way to a Wikipedia definition not before inserting a borderline sexist joke. But it’s alright. We, anyways, aren’t too famous to be cancelled. In case you didn’t like the above explanation, Nyka is an E-commerce platform for fashion products
Let’s take a look at their financials. Unicorn start-up refers to a private company valued at or over $1 billion — because just like the mythical creature, the statistical rarity of such a successful business venture is improbable, but not impossible. This is one of the rare ‘unicorns’ getting listed with a profit in their Profit and loss account, so we can safely say that the PAT is PHAT {Pretty hot and tempting}. Research team trying to be funny and relevant at the same time. Lol. The revenue growth for 2020 and 2021 is 60% and 40%, respectively. One might argue that it’s just been a year since they’ve been in the green but boy, oh boy, they have been EBITDA positive since 2017. But it's not just about the profitability, right? The company has also reduced total borrowing from INR 267 Crores to INR 187 Crores, a reduction by 30%! Well, who doesn't want to be debt-free?
At the helm of Nyka’s affair is Falguni Nayar, who was formerly the MD of Kotak Mahindra Capital. Keeping her entrepreneurial streak alive at an age where most of the people start planning their retirements, she definitely is a massive inspiration to the new crop of entrepreneurs. Mad respect for you Ma’am.
After finance, let’s cover the operation of the company. In 2021, 86% of the GMV came from online channels, and the rest, 14%, came from the 73 Nyka stores located in 38 cities in India. GMV stands for Gross Merchandising Value and is not to be confused with revenue.
What is Nyka going to do with the money raised from this IPO one may ask. Well, the funds will be utilized to open new offline stores, further reducing the company's debt burden by 130 crores, increasing advertisement and brand visibility by 200 crores, and investing in subsidiaries. These subsidiaries include Nyka cosmetic, Kay beauty (A joint venture between Katrina Kaif and Nyka), and Nyka Naturals.
As they say, all sugary relationships often end up with diabetes, allow me to give some 100% fresh TwisterBob Insight to you all.
While the INR 4000 crore might look staggering to you, you should also note that most of the money will go to the existing shareholders for their exit from the company (Sanjay Nayar, TPG Lighthouse and Sunil Munjal). The amount which will be invested in the operations of the business is INR 525 Crore.
The GMV growth attributed to Tier 2 and Tier 3 cities is 64%, which can quickly be countered by the cheaper alternatives available as the growth primarily came from the unavailability of unbranded options during the times of Covid-19
Our female friends keep complaining that customer service needs to improve, which is a big bummer for customer retention. I think this is a pretty solid insight
With such brand collaborations and expectations to go global, it will be great to see how this public issue turns out to be.
Hi, it’s the editor. We meet again. I like that you had the patience to sit through this article. A patronizing but heart felt pat on the back from my side. I think after today’s ‘out of the box’ antics I may be asked to vacate. In case, that happens, it was nice gaining ‘exposure’. If you liked the article, do tell in the comments the big hearted, always-considerate-to-their-intern, kind, sweet folks at TwisterBob and they might not sack me. Just might not.
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