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Ventura Wealth Clients
4 min Read
Piramal Enterprises

You may admire beauty and follow fashion trends but if you are reading this piece, perhaps, you love profit too, like any other stock market investor.

So, without wasting your time, let us give you three reasons why you may consider investing in Nykaa’s IPO.

#1: It has a huge addressable market opportunity

India’s beauty and personal care market is expected to grow from Rs 1.3 lakh crore to Rs 2 lakh crore between 2019 and 2025. During the same time period, the fashion market is expected to grow from Rs 5.8 lakh crore to 8.7 lakh crore.

In other words, Nykaa’s total anticipated addressable market opportunity is a massive Rs 10.7 lakh crore.

In 2019, online players accounted for just ~8% of the beauty and fashion market.

With growing penetration of smartphones, their share is bound to expand. At present, close to 48-53 crore Indians use smartphones. By 2025 this number is likely to rise to 75-85 crore.

#2: Nykaa has a distinguished positioning

Don’t you Google stuff before buying it, especially when you are not sure which product would best suit you?

Nykaa is simplifying purchase decisions of their potential customers by helping them with relevant content.

It believes in acquiring customers by educating them, keeping them informed about the latest fashion trends and helping them interact with beauty experts to arrive at the right buying decisions.

Mind you, Nykaa is not just an e-retailer selling fashion and beauty products but it’s offering best-in-class online shopping experiences to the internet-savvy Gen-Z population.

Moreover, Nykaa has adopted an inventory-based business model which helped it break-even faster than any other etailer of its size.

As on August 31, 2021, Nykaa had partnered with 3,055 influencers and 4,078 brands. It’s been launching private labels too, which are expected to play a big role in future growth.

And just to give you an idea about its presence in online beauty and fashion content, it had 39,498 Facebook and Instagram posts in FY21.  Nykaa’s YouTube Channel had a following of 12 lakh subscribers and its interactive social community platform, Nykaa Network, had a subscriber base of 36 lakh on August 31, 2021.

#3: Brand loyalty is a testimony to Nykaa’s work

The contribution of existing customers to the sales at MRP has gone up from 55% in FY19 to 70% in FY21, suggesting that Nykaa has successfully created brand loyalty.  No wonder, its average order value has grown by leaps and bounds. Naturally, satisfied and well-infromed buyers tend to make repeat purchases and that too of higher value.

Nykaa has all ingredients required to succeed in India’s online fashion and beauty retail market, which is at an inflection point at present.

And, if you are a Nykaa customer, ask yourself how satisfied are you with them? That may perhaps help you decide what you should do with its IPO.  After all, happy customers are the key to any brand’s success, more so in retail.

If you decide to invest in Nykaa’s IPO, use Ventura’s online platform. It will take only a few seconds to complete your application.

Happy investing!

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Disclaimer: The blog is for information purposes only and anything mentioned herein shouldn’t be construed as a fundamental reason to buy/hold/sell any stock. Furthermore, the information provided in the blog and observations made therefrom shouldn’t be treated as the extension of recommendations made on the other properties of Ventura Securities.

Please note, Ventura Securities Research division recently initiated the coverage on Vardhman Specialty Steel Ltd. If you are planning to take any investment decision based on the said coverage of Ventura Securities, we strongly recommend you to read risk factors/disclosures/disclaimers mentioned therein.

The same holds true for stock recommendations made on other properties of Ventura Securities.

We strongly suggest you to consult your financial advisor before taking any decision pertaining to your finances. Asset allocation becomes extremely relevant.

We, Ventura Securities Ltd, (SEBI Registration Number INH000001634) its Analysts & Associates with regard to blog article hereby solemnly declare & disclose that:

We do not have any financial interest of any nature in the company. We do not individually or collectively hold 1% or more of the securities of the company. We do not have any other material conflict of interest in the company. We do not act as a market maker in securities of the company. We do not have any directorships or other material relationships with the company. We do not have any personal interests in the securities of the company. We do not have any past significant relationships with the company such as Investment Banking or other advisory assignments or intermediary relationships. We are not responsible for the risk associated with the investment/disinvestment decision made on the basis of this blog article.

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