Banga Family to Sell Half of its Stake in Nykaa Block Deal: Report
In a major development in the Indian startup ecosystem, the Banga family, which owns a significant stake in beauty and wellness e-commerce platform Nykaa, is planning to offload nearly 2% of its stake in the company through a block deal. According to a report by Moneycontrol, the family will sell around 16 million shares, which is half of its current stake in Nykaa, at a discount of 4-5% from the current market price.
The block deal is expected to be executed on July 2, and the shares will be sold at a price that is lower than the current market price of Nykaa. This move is significant, not only because it marks the first major stake sale by the Banga family in Nykaa but also because it sets a benchmark for future sales of the company’s shares.
Nykaa, which was founded in 2012 by Falguni Nayar, has been a highly successful startup in India, with a strong presence in the beauty and wellness e-commerce space. The company has been backed by several prominent investors, including Fidelity, Lighthouse, and KKR, among others. In 2020, Nykaa raised $100 million in funding from these investors, valuing the company at over $1 billion.
The Banga family, which includes shipping tycoon Harindarpal Banga and others, has been a significant shareholder in Nykaa since its early days. They acquired a significant stake in the company in 2015, when Nykaa was still a relatively small startup. Over the years, the Banga family has been instrumental in guiding the company’s growth and strategy.
The decision to sell half of its stake in Nykaa is seen as a strategic move by the Banga family to monetize its investment in the company. The sale of 16 million shares is expected to fetch the family around $150 million, which is a significant return on their investment.
The block deal is also significant because it sets a benchmark for future sales of Nykaa’s shares. The company’s valuation has been increasing rapidly over the past few years, and the block deal is expected to impact the company’s stock price. Nykaa’s shares have been trading at around ₹2,500-2,600 per share, and the block deal is expected to reduce the company’s float in the market.
The Banga family will continue to hold the remaining stake in Nykaa after the block deal, which is expected to be around 32-33 million shares. This means that the family will still have a significant influence on the company’s direction and strategy.
The block deal is also seen as a vote of confidence in Nykaa’s growth prospects. The company has been expanding rapidly in recent years, and its valuation has been increasing rapidly. The block deal is expected to attract institutional investors, including foreign funds, who are interested in investing in Indian startups.
In conclusion, the Banga family’s decision to sell half of its stake in Nykaa through a block deal is a significant development in the Indian startup ecosystem. The move is expected to fetch the family around $150 million and sets a benchmark for future sales of Nykaa’s shares. The block deal is also seen as a vote of confidence in Nykaa’s growth prospects and is expected to attract institutional investors to the company.
