Public listed companies should try to open up more with investors to help them make the right investment choices, according to Falguni Nayar, founder & CEO of online beauty and personal care platform Nykaa.
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“I personally feel that you must try to share more information with the investor community so that they can make certain right choices. However, you know companies like us…we have a lot of data. We are data-driven and we have a lot of data and sometimes all the data cannot be put in public domain because there are monthly differences in the numbers, there are reasons for those differences, or, you know, investors may not understand what are the reasons for those differences,” Nayar said at the The Indian Express e-Adda on Thursday.
She was responding to a question on some new-age tech companies deviating from the practice of conducting quarterly analyst meetings and sharing profitability metrics after listing on the bourses.
“There is information that may be very competitive. I do not justify what others are doing. I think our own effort is going to be more about sharing as much as we can share in a safe manner so that investors who have chosen to invest or may choose to invest can make reasonable decisions based on that information,” she said.
Nykaa went public last year and its IPO was oversubscribed nearly 82.5 times, fetching a valuation of more than Rs 95,000 crore at its listing debut in November.
Along with her son Anchit, who looks after the beauty e-commerce business, and daughter Adwaita, who heads the fashion vertical, Nayar was interacting at the e-Adda with Anant Goenka, Executive Director, Indian Express Group, and Anil Sasi, National Business Editor, The Indian Express.
When asked if policy and regulatory intervention was required for new-age tech companies going public, Nayar said: “I can’t speak for them, I think SEBI (Securities and Exchange Board of India) is quite vigilant or you know they want to be quite on top of it at least with what we saw with our own document. They were quite thorough and I would have expected them to be similarly thorough for other companies. I can’t speak for the companies but I think SEBI as a regulator already is there and they are being quite mindful of trying to govern a new sector.”
Last year, in addition to Nykaa (FSN E-Commerce Ltd), several tech start-ups, such as Zomato, Paytm (One97 Communications Ltd), PolicyBazaar (PB Fintech Ltd) and Cartrade, hit the market with IPOs. While most of them saw an overwhelming response from the public markets, the share prices of a number of them have witnessed sharp corrections over the past three months.
Responding to a question on the valuations of tech companies in the absence of profitability, and whether there was room for corrections, Adwaita said: “Businesses have to transition to delivering meaty profitability and so I think, just being in the trenches of trying to build Nykaa, we found that it is actually so difficult to build a business at scale with reasonable profitability. My own personal opinion is some of the valuations floating around for start-ups, where there is clearly no business model and there is no path to profitability, do require a correction.”
Responding to a question on the beauty and personal care (BPC) consumer’s profile in India, Anchit said: “You look at all the data, it tells you that India is very early in its consumption journey. The per capita spend on BPC in India is only $14 annually. That number is close to $300-$400 in the West and it’s somewhere around $75 to $100 in China. So if you look at the data, it tells you that today where India is in terms of its consumption journey in BPC is where China was exactly 15 years ago in 2006.
“So I mean, there’s a total difference in terms of the purchasing power, the awareness, the education for a small town consumer in India versus that in LA in the US. I think that is what excites us so much that we’ve been able to build a business of our scale when we’re so early on in our journey as a country. The opportunity is massive and the addressable market is growing leaps and bounds.”
The Express e-Adda is a series of informal interactions organised by The Indian Express Group and features those at the centre of change.
Previous guests at the e-Adda, as these discussions moved online during the pandemic, include Infosys Non-Executive Chairman Nandan Nilekani, Union External Affairs Minister S Jaishankar, Union Minister for Road Transport and Highways and MSMEs Nitin Gadkari, Union Minister for Education Ramesh Pokhriyal, AIIMS Director Dr Randeep Guleria, former Chief Economic Advisor Arvind Subramanian and Kotak Mahindra Bank MD & CEO Uday Kotak.