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According to recent reports, Nykaa, the Omnichannel lifestyle retailer is preparing for its initial public offering (IPO) as it has converted itself into a public limited company.

Nykaa, founded in 2012, has recently renamed itself to FSN e-commerce Ventures Limited from FSN e-commerce Ventures Private Limited. The shareholders of Nykaa passed a resolution to this effect on July 16. This step by Nykaa keeps it on the path to an IPO, and the retailer is expected to file its draft red herring prospectus (DRHP) very soon.

Nykaa now joins the list of other companies which are now planning to go public, including Paytm, PolicyBazaar, MobiKwik, and CarTrade. According to latest industry reports, Nykaa is looking to raise about $700 million at a valuation of $4.5 billion in its IPO. With Nykaa’s news the Indian startup ecosystem is breathing a new whiff of growth, with IPOs ruling the aisle like never before.

While we wait for Nykaa’s official debut, the next big IPO from this ecosystem to watch out for will be Paytm, which has lined up Rs 16,600 crore and indications are that it is likely to hit the market in October this year.

IPOs also signals the movement of the Indian economy away from the foreign investments and drives the point home to Atmanirbhaar Bharat.

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“While operating profitability is expected to be impacted by 200 basis points (bps), the absolute fall in operating profits will be much sharper, necessitating additional funding, mainly debt, by firms to make up for cash flow shortfalls,” Crisil said.

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Among potential opportunities, experts believe that COVID-19 crisis has given great impetus to convergence, collaboration and co-creation. “We should acknowledge our strengths and should focus on partnering by utilizing others’ business acumen. If there is an opportunity in terms of resources and space, then retailers must coordinate and collaborate. I for one would not mind collaborating with new categories like medicine, beauty, wellness or even salons, which will enhance services at my stores. It is the time to accelerate collaboration over competition,” says Lalit Agarwal, CMD, V-Mart Retail.

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For a fashion brand or retailer to bounce back after the lockdown is lifted, they will have to be attentive about the shifts in market sentiments to identify possible opportunities and attune themselves accordingly. Failure to adopt to market changes may have devastating effects. A good example is Clarks – the British heritage footwear retailer. Failure to adapt has left Clarks in a weak position to withstand the COVID-19 crisis and it has recently announced that it is cutting almost 1,000 head office roles.

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“Technology will play an important role given the limited human interaction due to social distancing, at least initially post-lockdown, if not permanently. We need to start leveraging elements of technology such as artificial intelligence (AI) and virtual reality (VR), be it in online shopping or shopping bulk products. Consumers will be interested in figuring out how products look on them virtually. Other factors such as ‘Buy Online, Pick-Up at Store’ or getting products delivered at home should also be taken into consideration to enable smooth sales,” she said.

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