FirstCry-parent files DRHP with SEBI to launch IPO; M&M, Ratan Tata to sell shares’

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

While the IPO size is not yet disclosed, It includes a fresh issue of shares worth up to Rs 1,816 crore and an Offer for Sale (OFS) of up to 54,391,592 equity shares by existing investors.

Who are the selling shareholders?

Major shareholders like SoftBank, Mahindra & Mahindra (M&M), and US private equity fund TPG are part of the offer for sale (OFS). SoftBank, holding a 25.5% stake, is set to sell 2.03 crore shares, while M&M plans to offload up to 28.06 lakh shares. 

Other notable sellers include Ratan Tata, Tata Sons Chairman Emeritus, who will sell his entire stake of 77,900 shares, and FirstCry Co-Founder and CEO Supam Maheshwari, divesting 18.24 lakh shares.

Establishing new modern stores

According to the company, the raised capital from the IPO will be utilized towards setting up new modern stores and a warehouse, lease payments for existing stores, sales and marketing, technology and data science costs, funding acquisitions, and strategic initiatives.

Additionally, A portion of the funds will be used for the market expansion in Saudi Arabia. The company operates 936 modern stores and plans to add 336 new stores under the BabyHug brand and 147 stores under the FirstCry brand in the next three fiscal years.

How well is FirstCry performing financially? 

Earlier this week, FirstCry said it reported that its revenue from operations soared to Rs 5,632 crore, marking a 2.4-fold increase from the previous fiscal year's revenue of Rs 2,401 crore. However, this growth was accompanied by a staggering six-fold rise in net losses, reaching Rs 486 crore, up from Rs 79 crore in FY22. 

Key details of FirstCry's IPO

The IPO will see 75% of equity shares reserved for qualified institutional bidders, 15% for non-institutional investors, and the remaining 10% for retail investors. Kotak Investment Banking, Morgan Stanley, BofA Securities, JM Financial, and Avendus are the book-running lead managers. 

The company offers a range of products, including apparel, toys, and accessories for babies, kids, and mothers, both online and through physical stores.

Join our new WhatsApp Channel for the latest startup news updates