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Nykaa CEO Falguni Nayar learnt these two things from Uday Kotak –

Falguni Nayar, a former investment banker, turned entrepreneur just few months before turning 50.

Before founding Nykaa, Falguni Nayar was one of India’s leading investment bankers, who worked at the Kotak Mahindra Group for nearly two decades. And there were two key lessons she learnt from ace banker Uday Kotak that she religiously followed when she built her beauty and fashion e-commerce platform.

When asked if Uday Kotak had any advice for her in running a public listed company, Nayar told Moneycontrol, “I didn’t really ask him. But from watching him through many years that I worked for him, there are a couple of things that I learned from him. One, corporate governance remains important. The second is “don’t do anything which is financially not sustainable”, she said.

This meant the right unit economics and the right financial incentives for consumers to buy on her website.

“You shouldn’t provide wrong incentives for consumers to buy on your website because that is not sustainable. So many of these things I do believe I learned from him. I used to joke about it that if I do something wrong, like free shipping at any level, that is something that Uday would not approve of. So there are many lessons that stay in my mind on whether I would or would not do something,” she quipped.

Also Read: A look at Nykaa’s incredible journey

Nayar had a blockbuster listing on the bourses on November 10th, 2021. The shares of her company got listed with a massive premium of over 79 percent, against an issue price of Rs 1,125, making her net worth soar to $6.5 Billion.

A graduate of IIM Ahmedabad, Nayar turned entrepreneur in 2012, just a few months before turning 50 years old. Nykaa is also one of the most unique startups to hit the public markets in India- it is the only profitable unicorn going public, and a rare new-age firm where its promoter group still owns more than half the company.

Uday Kotak, a billionaire banker is the Executive Vice-Chairman and Managing Director of Kotak Mahindra Bank (KMB), one of India’s most respected and valued firms.

Also Read: Nykaa market cap at Rs 1.04 lakh crore

In the book, “How Uday Kotak Built a Valuable Indian Bank”, authors R Gopalakrishnan and Tulsi Jayakumar narrated the story of how Kotak retained Nayar when she was ready to quit and move overseas when her husband got a job abroad.

“We had started a consulting division in Kotak Mahindra Finance Limited (KMFL). A year after she(Falguni) joined us, Sanjay Nayar, her husband who was working with Citibank, was posted to London. Like a typical Indian wife, she wanted to join him. So, we took a view – We said, ‘Falguni, if you go to London, we will set up a London office. We want to do sales and trading in equities and in GDRs. Why don’t you set it up?” Uday Kotak recounts.

“So, Falguni set up our London office. Kotak Mahindra (UK) happened because of Falguni. After two years, Sanjay was transferred to New York. We said, Great! Falguni set up New York: By then, we had already set up a JV with Goldman. I asked her to work for 6 months at the Goldman Sachs office. Then we set up our separate office in New York. When Sanjay returned to India as Country Head, Citibank, we brought her back as Head of our equities business in India. She headed Kotak Investment Banking, a subsidiary of KMB”.

In 2012, Falguni told me, ‘Uday, I am happy with what I have been doing. I have done well, but I want to do something different. I won’t compete with you. I asked, ‘What are you going to do?’ She said, ‘I am passionate about doing something on the Internet and beauty.”

She called the venture Nykaa, derived from the Sanskrit word Nayika meaning heroine.

“I hope the Nykaa journey can inspire each of you to be the Nykaa of your lives”, she said minutes before its stellar listing on the bourses.

Missed the interview with Falguni Nayar? Read it here.