The Fall Everyone Remembers
Nykaa's November 2021 IPO was a moment. India's first woman-led unicorn to go public. ₹1 lakh crore market cap on listing day. Falguni Nayar becoming one of India's richest self-made women. It was a genuine celebration of Indian entrepreneurship.
What came next was painful. The stock fell relentlessly through 2022 and 2023. A controversial bonus share issue — which critics argued was structured to benefit promoters and insiders ahead of lock-in expiry — damaged trust severely. SEBI scrutiny followed. Short-sellers circled. At its lowest, Nykaa traded at roughly ₹100 per share, compared to a listing price of ₹2,018.
The question everyone stopped asking — and should start asking again — is: what actually happened to the business?
The Business Never Really Broke
Here is the inconvenient truth that the stock price noise obscured: Nykaa's core beauty business has been profitable since FY23 and has kept growing. Revenue crossed ₹6,386 crore in FY24, up 24% year-on-year. Gross margins on beauty (inventory-led model) hover at 35–38%, which is genuinely impressive for an Indian e-commerce company.
The problem was always Nykaa Fashion — the apparel vertical that Nykaa entered aggressively after its IPO. Fashion is a brutal, commoditised, low-margin business. The same ₹300 kurta is sold on Meesho, Myntra, Amazon, and 40 other platforms. Nykaa entered late, without differentiation, and burned cash doing it.
The 2025 course correction: Nykaa Fashion pivoted to premium and bridge-to-luxury positioning — designer wear, occasion dressing, premium western. This is a smaller market but one where Nykaa's brand equity from beauty actually transfers. Early results are encouraging.
The SuperStore Strategy
The most interesting Nykaa development of 2025 is Nykaa SuperStore — a B2B distribution arm selling beauty products to salons, beauty clinics, and multi-brand retailers. This is a completely different business model: lower margins but predictable, recurring, and defensible.
B2B beauty distribution in India is largely unorganised. Nykaa's brand relationships — it has direct partnerships with Estée Lauder, MAC, Bobbi Brown, Charlotte Tilbury, and 4,000+ brands — give it unmatched purchasing power. If SuperStore scales, it could add ₹1,500–2,000 crore in revenue by FY27 at decent margins.
What to Watch in FY26
Three things will determine whether Nykaa re-rates meaningfully:
- Fashion unit economics. If Nykaa Fashion reaches contribution margin breakeven in FY26, the "burning cash on fashion" narrative goes away permanently.
- SuperStore GMV. Watch for any disclosure of B2B numbers. Even ₹500 crore in B2B GMV would signal a structural new revenue line.
- International expansion. Nykaa has been quiet about its Middle East push (UAE, Saudi Arabia). Given the Gulf's massive appetite for premium beauty products and Indian diaspora presence, this is a significant optionality.
Falguni Nayar built Nykaa from zero, at 50, with no prior tech startup experience, and took it to a listed company with 36M+ customers. The comeback narrative is more interesting than the fall story. It is worth paying attention to.