FirstCry's parent Brainbees Solutions refiles IPO papers, What's Changed?

Brainbees Solutions, the parent company of an omnichannel retailer of childcare products, FirstCry, has re-filed preliminary papers with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

According to an ET report, The move comes after the market regulator directed the company to re-file the draft documents due to inadequate disclosure of key performance indicators (KPIs).

As per the updated draft red herring prospectus (DRHP), the Pune-based company's IPO size remains unchanged.

IPO structure

The proposed IPO includes a fresh issue of equity shares worth up to Rs 1,816 crore and an Offer for Sale (OFS) of up to 5.44 crore equity shares by existing shareholders. The company's KPIs include metrics such as the number of orders, average order value, and annual transacting customers.

Is FirstCry profitable?

For the nine months ending December 2023, Brainbees Solutions reported a net loss of Rs 278 crore and an operating revenue of Rs 4,814 crore.

According to the draft papers, around 77% of the company's total sales came through online channels, while the remaining 23% were through offline stores.

Who are the selling shareholders in the OFS?

Under the OFS, SVF Frog, a Cayman Islands-registered entity of Softbank, will sell 2.03 crore equity shares of Brainbees Solutions Ltd, and Mahindra & Mahindra (M&M) will offload 28.06 lakh shares of the company. 

Currently, Softbank holds a 25.55% stake in Brainbees Solutions and M&M owns a 10.98% stake in the multi-brand retailing platform, the draft papers showed.

Other shareholders participating in the OFS include PI Opportunities Fund, TPG, NewQuest Asia Investments, Apricot Investments, Valiant Mauritius, TIMF Holdings, Think India Opportunities Fund, and Schroders Capital.

What does FirstCry do?

Founded in 2010, FirstCry sells a wide range of products for babies, kids, and mothers through its online platform and physical stores. The company has raised about $425 million to date and became a unicorn in 2020 when Softbank invested around $300 million.

Leadership remuneration

Last week, it was reported that Supam Maheshwari, founder and CEO of FirstCry, witnessed a 49% reduction in his monthly remuneration, amounting to Rs 8.6 crore in the first three-quarters of FY24, compared to Rs 16.7 crore in the preceding year.

His overall earnings totalled Rs 77.5 crore in the first three-quarters of FY24, compared to Rs 200.7 crore for the entire FY23.