Falguni Nayar's Nykaa to raise Rs 125 crore through non-convertible debentures

Beauty and personal care e-commerce giant Nykaa is raising Rs 125 crore (approximately $15 million) through non-convertible debentures (NCDs).

In a regulatory filing on Monday, the company revealed that the board of directors of Nykaa E-Retail Limited, a wholly owned subsidiary of FSN E-Commerce Ventures Limited, has approved the issuance of up to 12,500 NCDs at a face value of Rs 1 lakh each.

These debentures will be issued in dematerialized form on a private placement basis to a foreign portfolio investor whose identity has not been disclosed.

"Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), we hereby inform you that the Board of Directors of Nykaa E- Retail Limited (“Nykaa”), a wholly owned subsidiary of FSN ECommerce Ventures Limited (“Company”), has approved and authorized the issuance of up to 12,500 (Twelve Thousand Five Hundred Only) Unlisted, Unsecured, Unrated, Redeemable, Non-Convertible Debentures with the face value of INR 1,00,000 (Indian Rupees One Lakh only) each at par for an aggregate amount of up to INR 125,00,00,000 (Indian Rupees One Hundred and Twenty-Five Crores) in dematerialised form on a private placement basis, to certain foreign portfolio investor, as identified by the Board of Directors of Nykaa, at its meeting held on July 22, 2024."

Recent business moves and expansion

The development comes weeks after Nykaa's step-down subsidiary, Nessa International Holdings, established a wholly-owned subsidiary in Qatar named Nysaa Cosmetics Trading. 

Nysaa Cosmetics is set to engage in the international export, sale, and trade of beauty and personal care products.

Additionally, Nykaa recently restructured its business verticals, acquiring the western wear and accessories segment of Nykaa Fashion Limited for Rs 133.7 crore in May.

Nykaa's financial performance

Nykaa's revenue from operations increased by 24.1%, reaching Rs 6,386 crore in FY24 from Rs 5,144 crore in FY23.

Additionally, the company's profit surged by 90.5%, rising to Rs 40 crore in FY24 from Rs 21 crore in the previous fiscal year.

For the first quarter of FY25, Nykaa has projected a revenue growth of around 22-23% year-over-year, and its Gross Merchandise Value (GMV) is expected to grow in the mid-twenties percentage range on a YoY basis.

Investing in subsidiaries

In its annual results, Nykaa outlined its GCC expansion plans through an investment of Rs 20 crore in FSN International. The company also revealed plans to make additional investments of $1.9 million through its international arm in Nyssa International

These investments are part of Nykaa’s broader strategy to enhance its international presence and diversify its revenue streams.

Founded in 2012 by Falguni Nayar, Nykaa has grown into a leading platform for beauty and wellness products. It has 14 subsidiaries and an associate company named Earth Rhythm.