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Shakeup at Nykaa: Five Top Executives Depart in Mass Exodus

Nykaa Clarifies Recent 'Mid-Level Exits' as Part of Standard Annual Appraisal and Transition Process

24 March 2023

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Jayashri Ghorpade

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  • According to Nykaa, the recent departures of several employees were classified as 'mid-level exits' and were part of the standard annual appraisal and transition process.

  • Nykaa's CFO Arvind Agarwal's departure to join fintech startup PayU occurred almost four months before the recent mass resignations.

  • Nykaa shares have dropped by 56% from their 52-week high of INR 315.86 in April last year, currently trading at INR 137.8 on the BSE.

Reports suggest a major trouble brewing at beauty ecommerce platform Nykaa as five senior executives, including chief commercial operations officer Manoj Gandhi, chief business officer of fashion division Gopal Asthana, and chief executive officer of wholesale business Vikas Gupta, have quit the company, according to Reuters. The departures also include the resignations of vice-presidents Shuchi Pandya of Nykaa’s Owned Brands vertical and Lalit Pruthi of finance.


Confirming the development, a Nykaa spokesperson told Reuters that it sees ‘some of these mid-level exits as part of the standard annual appraisal and transition process, wherein people exit due to performance or to pursue other opportunities’.


“Voluntary and involuntary exits are expected in a fast-paced, growth-focused, consumer tech organisation with over 3,000 on-roll employees,” the spokesperson added.


The departure of five top executives from Nykaa is happening concurrently with the company struggling against intensifying competition and a plummeting stock price. In fact, this exodus occurred soon after Macquarie brokerage set a target price of INR 115 on Nykaa stock, indicating a downside of over 16% to the stock's Friday (March 24) close.

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A Continuing Saga of Departures

Nykaa has been facing top-level exits, with five executives leaving at a critical time. In November 2022, Nykaa's Chief Financial Officer (CFO), Arvind Agarwal, resigned and later joined fintech startup PayU. Reena Chhabra also left last year as the CEO of Nykaa's private label division FSN Brands, while CTO Sanjay Suri resigned from the listed platform for unknown reasons in 2022.


Multiple exits from Nykaa's top executives have occurred, and the reasons are unclear. However, the company has been struggling with narrowing profits and growing strain due to its plummeting stock price. Furthermore, inflationary pressure and slowing discretionary spending by users appear to have impacted the company's bottom line last quarter, even though revenues have improved. Nykaa shares have fallen by 56%, from its 52-week high of INR 315.86 in April last year, to INR 137.8 on the BSE.


In addition, major investors such as Lighthouse and Kravis Investment Partners have sold off numerous Nykaa shares in the open market as they attempt to recover what they can. The recent resignations of five top executives are expected to compound the challenges faced by Nykaa, which is already struggling to mitigate bearish market sentiment.


The recent entry of Reliance Retail into the beauty ecommerce space through Tira has made matters worse for Nykaa. Although the platform is yet to open for the general public, the move is seen as a direct assault on Nykaa’s turf. This is compounded by the fact that players such as Tata Cliq Palette, Sephora, and Myntra are doubling down on their presence in the domain.

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