$140M Exit: Banga Family to Offload Major Stakes in Nykaa Block Deal

According to a term sheet accessed by a media outlet, Harindarpal Singh Banga and Indra Banga would sell a 2.1% share in the beauty and personal care firm Nykaa for $140.3 million (about INR 1,200 crore) in a block sale.

According to the term sheet, the Bangas, who were among the first investors in Nykaa, are selling roughly 60 million shares at an offer price of INR 200 per share, which is 5.5% less than the most recent closing price.

Nykaa's operator, FSN E-Commerce Ventures Ltd., ended Wednesday's trading session on the National Stock Exchange just over 2% higher at INR 211.59. Thus far this year, the stock has increased by 28.7%.

Goldman Sachs and JP Morgan Managing the Transaction

The deal is being handled by JP Morgan and Goldman Sachs. Before Nykaa went public in 2021, Banga, a billionaire in commodities and the chairman of the Caravel Group, based in Hong Kong, owned 8.7% of the company.

The business' founders, the Nayar family, still hold 52% of the company and haven't sold any shares since the IPO. Nearly a year has passed since Banga sold more than four crore shares, or 1.43% of the company, for INR 208.30 each in August 2024, bringing in INR 851.5 crore.

His holding dropped from 6.40% to 4.97% after that deal. Nykaa reported a nearly threefold increase in consolidated net profit for the quarter ending March 31 from INR 6.93 crore to INR 20.28 crore. Operational revenue increased from INR 1,667.98 crore in FY24 to INR 2,061.76 crore, a 23.61% increase.

Nykaa Eyeing for More Profitable Trajectory

With collaborations with Yves Saint Laurent, NARS, Kerastase, Eucerin, GHD, Armani Beauty, Supergoop, and Nexxus, among others, Nykaa has introduced a record amount of international beauty brands in the last 12 months.

With a goal of mid-20% yearly growth in its beauty and personal care (BPC) sector over the next five years, Nykaa is now moving towards a more lucrative growth trajectory.

Deeper market penetration, premiumisation, and improved convenience are all part of the plan. By FY30, the company wants to expand its physical presence in tier 2 and tier 3 cities, growing from 237 to over 500 stores.

Additionally, it is making significant investments in local influencer marketing, collaborating with more than 28,000 influencers to promote discovery. Nykaa is expanding its logistical infrastructure in an effort to increase delivery speeds.

Its "Nykaa Now" two-hour fulfilment strategy is operational in seven metro areas. A network of 44 warehouses and more than 40 quick hubs equip Nykaa Now service, allowing for same- or next-day delivery in major cities.