FirstCry Files for IPO: Key Highlights from DRHP, Including Financials, Objectives, and Competitors

Brainbees Solutions, the parent company of the well-known online platform FirstCry, has officially submitted its application for an Initial Public Offering (IPO) to the Securities and Exchange Board of India (SEBI) on December 28. The IPO, seeking a valuation of approximately $3.5-3.75 billion, involves both fresh equity shares worth ₹1,816 crore and an Offer for Sale (OFS) by existing shareholders and promoters.

IPO Details:

– The IPO comprises fresh equity shares worth ₹1,816 crore and an OFS by existing shareholders, including Mahindra & Mahindra (M&M), TPG, NewQuest Asia, and SoftBank.

– Mahindra & Mahindra will sell its 0.58 percent stake, and SoftBank plans to offload 2.03 crore shares.

– FirstCry may consider a private placement of shares to certain investors for up to ₹363.20 crore.

 

IPO Timeline and Reservation:

– The opening and closing dates for the IPO subscription are yet to be announced.

– Media reports suggest the public issue will open in early 2024.

– The issue will follow the book-building process, with allocations to qualified institutional buyers, non-institutional investors, and retail individual bidders.

 

IPO Objectives:

– Net proceeds from the IPO will be utilized for setting up new retail stores, warehouses, and international expansion.

 

About FirstCry:

– Backed by SoftBank, FirstCry offers baby, kids, and mother-care products online and through physical stores.

– As of June 30, 2023, the company has over 936 stores in 465 cities, offering more than one million SKUs from 6,800 brands.

– Financials for FY23 show a six-fold increase in net loss to ₹486 crore, with revenue from operations rising 135% to ₹5,633 crore.

 

Competitors and Industry Overview:

– Competitors include Amazon, Flipkart, Hopscotch, Myntra, and others.

– India has the largest child population globally, with spending on childcare products expected to grow at a CAGR of 15% from 2022 to 2027.

 

Book-Running Managers:

– Kotak, Morgan Stanley, Bofa Securities, JM Financial, and Avendus are the book-running lead managers.

– Link Intime India Private Limited is the registrar of the offer.

 

Risks and Future Outlook:

– FirstCry acknowledges potential risks in marketing expenses, expansion, retail distribution, and stock options that could impact its financial condition.

– The company emphasizes uncertainties in maintaining or increasing revenues if customer acquisition challenges arise.