Online fashion and beauty commerce player Nykaa is raising Rs 125 crore, about $15 million, by issuing nonconvertible debentures. It was a strategic financial move approved by the board of Nykaa, according to a filing with the National Stock Exchange.
PC: Northeast Herald
Nykaa is going to issue up to 12,500 NCDs at an issue price of Rs 1,00,000 each, thereby raising the total amount in fully dematerialized form on a private placement basis. Further, this disclosure revealed that such debentures would be issued to one foreign portfolio investor. The name of the investor is not known, though.
While Nykaa has not specified the purpose of this fund-raising exercise, it has indicated that its UAE-based subsidiary Nysaa Beauty will get an investment of $2.5 million in one or more tranches. This move could be in furtherance of its broader plans to increase its international footprint and set the base for its subsidiary operations. Nykaa currently has 14 subsidiaries and has one associate company, Earth Rhythm.
The major revenue model of Nykaa comprises selling beauty, personal care, fashion, and other products and services across its various platforms. It has posted strong growth in revenues from operations on the financial front; this rose by 24.1% to Rs 6,386 crore in FY24 from Rs 5,144 crore in FY23. Moreover, Nykaa posted a strong 90.5 percent rise in profit to Rs 40 crore in FY24 from Rs 21 crore in FY23. Guidance given by the company is for an increase of 22-23 percent sequentially during the first quarter of FY25.
In a related development, Nykaa announced fresh employee stock option or ESOP options for its employees ahead of the Q4 results. Expansion of the ESOP pool is done to promote employee ownership and to attract, retain, and motivate talent in line with the company’s growth objectives.
The strategic financial moves that Nykaa has harnessed with regard to NCD issuance and investment in a subsidiary reflect its commitment to sustenance of growth and market presence. In view of the strong financial performance and new initiatives lined up, the company establishes itself as one of the top players in the online fashion and beauty commerce market.
A continued ability to innovate and grow will be important for Nykaa in the competitive landscape, leaning on significant investments and ensuring strong financial health toward the attainment of its long-term business goals. Additionally, its focus on employee engagement and international expansion further underlines a holistic approach toward growth and sustainability.
