India’s leading beauty and lifestyle retailer Nykaa has further strengthened its position in the fast-growing clean beauty market after increasing its ownership in homegrown personal care brand Earth Rhythm, deepening a strategic partnership that has evolved from a minority investment into significant control of the business.
The latest transaction marks another step in Nykaa’s broader strategy of building a powerful portfolio of beauty brands that it can support with its extensive digital platform, physical retail network, marketing capabilities and distribution infrastructure.
According to recent company disclosures, Nykaa has completed the acquisition of an additional stake of about 24.2% in Earth Rhythm, taking its ownership to approximately 100% on a converted basis, following earlier investments that had already made the clean beauty company a majority-owned subsidiary. YourStory.com
The development is significant because Earth Rhythm represents a category that continues to attract increasing attention from consumers seeking skincare, haircare and personal care products built around cleaner formulations, sustainability and ingredient transparency.
For Nykaa, expanding ownership of the brand gives it greater influence over Earth Rhythm’s future direction while allowing it to capture more of the value generated as demand for modern beauty products continues to rise.
DDM News reports that Nykaa’s relationship with Earth Rhythm dates back to 2022, when the retailer first invested in the company.
At that time, Nykaa acquired an 18.51% minority stake for approximately ₹41.7 crore as part of Earth Rhythm’s Series A funding round.
The investment reflected Nykaa’s early confidence in the brand’s research-driven approach and its positioning within India’s emerging clean beauty segment.
Earth Rhythm was founded by Harini Sivakumar, who began developing the business after seeking safer skincare products for her son.
The company, which was formerly known as Soapworks India, built its identity around clinically effective, science-focused beauty products while maintaining an emphasis on sustainability.
Its portfolio spans skincare, haircare and other personal care categories, with products designed to appeal to consumers increasingly interested in both efficacy and responsible consumption.
Nykaa’s initial minority investment eventually developed into a much larger commitment.
In August 2024, the company announced plans to invest up to ₹44.5 crore through a combination of primary and secondary transactions to increase its ownership of Earth Rhythm.
The first tranche was completed in November 2024, after which Earth Rhythm became a subsidiary of Nykaa. NSE Archives
The subsequent investment demonstrates how Nykaa has been increasingly willing to move beyond simply selling beauty products on its platform and instead take ownership positions in promising consumer brands.
By controlling or holding substantial stakes in emerging brands, the company can potentially influence product development, branding, customer acquisition and distribution while using its existing ecosystem to accelerate growth.
The strategy is particularly relevant as India’s beauty industry undergoes a major transformation.
Consumers are becoming more knowledgeable about ingredients, formulations and product performance, while social media and digital commerce are making it easier for smaller beauty companies to build national audiences.
This has created an environment in which specialist brands can grow rapidly, but it has also increased competition for consumer attention.
Earth Rhythm fits directly into this changing landscape.
Its emphasis on research-based formulations and sustainable beauty gives Nykaa exposure to a segment where consumers are increasingly looking beyond conventional mass-market products.
The brand has also developed innovative formats, including sunscreen sprays and shampoo bars, while building a presence through its own website, third-party marketplaces and quick-commerce platforms. Nykaa
The latest transaction therefore goes beyond a simple increase in shareholding.
It reinforces Nykaa’s ambition to develop a broader ecosystem of owned and acquired beauty brands capable of benefiting from its scale. Its portfolio already includes brands such as Dot & Key and Kay Beauty, giving the company exposure across different price points and consumer segments.
The performance of Nykaa’s broader beauty portfolio has also provided an incentive for the company to continue pursuing this strategy.
Recent reports indicate that its House of Nykaa portfolio recorded strong growth in its annualised gross merchandise value run-rate during FY26, while the company’s beauty business continued to expand at a healthy pace in the first quarter of FY27. YourStory.com
For Earth Rhythm, greater integration with Nykaa could provide access to resources that would otherwise take significantly longer to develop independently.
These include wider distribution, stronger marketing, deeper customer data, retail expansion and the ability to scale product categories more aggressively.
For Nykaa, meanwhile, greater ownership could allow the company to capture more of Earth Rhythm’s future growth rather than benefiting primarily from selling the brand’s products through its platform.
It also gives the retailer greater control over how the brand is positioned as competition intensifies in India’s beauty and personal care market.
The transaction comes at a time when strategic consolidation is becoming increasingly visible across India’s beauty industry.
Established consumer companies and investment-backed groups are looking to acquire or partner with digitally native brands that have already demonstrated consumer acceptance.
Rather than building every new brand from scratch, larger companies can use acquisitions to gain access to established products, loyal customers and entrepreneurial expertise.
DDM News understands that this makes Earth Rhythm strategically valuable to Nykaa beyond its current scale.
The company has already demonstrated its ability to establish a distinct identity in clean beauty, meaning Nykaa can focus on accelerating the brand rather than creating its proposition from the ground up.
The latest deal also highlights the evolution of Nykaa itself.
Since its public-market debut, the company has increasingly sought to balance its role as a marketplace and retailer with the development of proprietary and controlled brands.
Its growing ownership of companies such as Earth Rhythm allows it to participate more directly in the creation of brand value across India’s expanding beauty economy.
As consumer preferences continue to shift toward science-backed formulations, sustainability and personalised beauty solutions, the clean beauty segment is likely to remain an important battleground.
Nykaa’s decision to deepen its ownership of Earth Rhythm signals that it sees substantial long-term potential in the category.
The move ultimately reflects a broader transformation in India’s beauty industry: digital-first brands are becoming acquisition targets, while established platforms are moving upstream to secure greater control over the products consumers increasingly demand.
For Nykaa, strengthening its position in Earth Rhythm represents another calculated step toward becoming not only a leading destination for beauty products, but also a significant owner and builder of the brands shaping India’s next generation of beauty consumption.
