December 28, 2023
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FirstCry files IPO papers to raise Rs 1,816 crore.
Brainbees Solution, which operates omnichannel businesses of childcare products under the brand name FirstCry, has filed papers for its IPO with markets regulator Sebi.
While the size of the IPO is not yet known, it includes a fresh issue of shares worth up to Rs 1,816 crore. The offer for sale (OFS) part includes offloading of up to 54.4 million shares by existing investors like SoftBank, Mahindra & Mahindra (M&M) and US private equity fund TPG.
Other selling shareholders include PI Opportunities Fund, TPG, NewQuest Asia, Apricot Investments, Valiant Mauritius Partners, TIMF Holdings, Think India Opportunities Master Fund and Schroders Capital Private Equity Asia.
SoftBank is FirstCry’s biggest shareholder and holds 25.5% stake in the startup, followed by M&M’s 10.98% stake.
The list of individuals selling shareholders include Tata Sons Chairman Emeritus Ratan Tata and FirstCry Co-Founder and CEO Supam Maheshwari.
Tata, who had picked up 0.02% stake for Rs 66 lakh in the startup, will sell all his 77,900 shares in the IPO. His average cost of acquisition comes to Rs 84.72 per share, shows FirstCry’s draft red herring prospectus (DRHP) filed with market regulator Securities and Exchange Board of India (Sebi). His total investment in the company, therefore, comes to about Rs 66 lakh.
Maheshwari, on the other hand, is divesting 18.24 lakh shares out of 2.89 crore shares in his pocket. Ahead of the IPO, Maheshwari held a 5.95% stake in the company.
Business:
As of June 30, 2023, Brainbees owned a total of 936 modern stores, out of which 321 were company owned and company operated. In the next 3 fiscal years, it plans to set up 336 new stores measuring an aggregate of approximately 0.59 million square feet under the BabyHug brand. It also plans to add another 147 stores measuring approximately 0.51 million square feet under the FirstCry brand and other home brands.
Objects of the IPO
Net proceeds from the IPO would be spent in setting up new modern stores, warehouse, lease payments for existing stores, sales and marketing, technology and data science cost, funding inorganic growth through acquisition and other strategic initiatives. A part of the proceeds would also be spent for overseas expansion in Saudi Arabia.
Lead Managers
Book running lead managers to the IPO include Kotak Investment Banking, Morgan Stanley, BofA Securities, JM Financial and Avendus.
Financials
In FY23, Firstcry’s consolidated net loss widened to Rs 486.05 crore while consolidated revenue was up over two fold to Rs 5,632.53 crore. It had reported a net loss of Rs 78.68 crore and its revenue from operations was at Rs 2,401.28 crore for the financial year that ended on March 31, 2022.
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