This Company IPO Has Unique Business Model On The Cusp Of A Large Opportunity

Motilal Oswal Institutional Equities lately analyzed Nykaa’s DRHP to grasp the chance within the BPC and Style segments, the corporate’s enterprise mannequin, and the aggressive panorama. The corporate is prone to come-up with an IPO shortly and Motilal Oswal institutional Equities believes the corporate has a singular enterprise mannequin on the cusp of a big alternative.

Giant market alternative

The brokerage carried out a web-based survey among the many goal demographics and offered its findings. In line with the identical, the Indian Magnificence and Private Care (BPC/Style market is predicted to succeed in Rs 2t/Rs 8.7t by CY25 – posting a CAGR of 12.7%/18% from CY20. The net BPC and Style markets are rising at a good quicker tempo.

“Whereas on-line channels account for simply 8% of India’s BPC market, it’s pertinent to notice that 70% of the market is estimated to be unorganized. Thus, on-line channels are estimated to contribute 27% to the organized area, and Nykaa is well-placed to guide the web/organized portion of this market progress with a confirmed enterprise mannequin,” the brokerage has stated.

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In line with Motilal Oswal certainly one of Nykaa’s key strengths lies in its inventory-led enterprise mannequin for the BPC phase. “Whereas it assumes the danger of obsolescence and bears a listing value, it permits the corporate to supply authentication for all its merchandise, guarantee availability, and allow environment friendly distribution. Its expertise is geared to allow fungible stock throughout onlineand offline channels, permitting for environment friendly stock administration. As seen from our survey responses, the widespread availability of spurious merchandise is a priority amongst on-line BPC customers. Accordingly, a assure of authenticity presents consolation to prospects,” the brokerage has stated.

Influencer community

With a community of over 1,300 influencers and 12.6m followers throughout main social media platforms, Nykaa is ready to drive widespread product and influencer-led schooling by means of inventive and entertaining content material throughout video and written codecs.

“Nykaa creates and movies the vast majority of its content material in-house by means of the Nykaa Military. Furthermore, it leverages influencers on a big scale by means of the Nykaa Affiliate Program, enabling exterior content material creators to publish content material on their behalf throughout a number of digital platforms. Endorsement by well-known influencers additional strengthens the belief within the platform,” the brokerage has stated.

The pricing and the date of the IPO shouldn’t be identified, however, for those who go by the Motilal Oswal report and the markets at document peaks, even this IPO ought to get a stable response.