Brainbees Solutions, the parent company steering the kids-focused omnichannel retailer FirstCry, has taken a significant step toward its initial public offering (IPO) by submitting a draft red herring prospectus (DRHP) to India’s Security Exchange Board (SEBI).
The company aims to secure funds through two avenues: a fresh issue of equity shares totaling up to Rs 1,816 crore and an offer for sale (OFS) of up to 54,391,592 equity shares.
As detailed in the DRHP, a notable portion of the OFS—approximately 37.35%—will involve the sale of shares by SoftBank, equating to 20,318,350 equity shares. Additionally, several entities including Mahindra & Mahindra, Premji Invest, New Quest Asia, Apricot Investments, Valiant Partners, TIMF Holdings, Think India Opportunities, and Schroders Capital will participate in divesting their shares in the OFS.
FirstCry’s stated utilization of the raised capital covers a broad spectrum, spanning the establishment of modern stores and warehouses, investment in subsidiaries, technological advancements such as data science, marketing efforts, potential acquisitions, and general corporate needs.
The IPO is set to be managed by a consortium of book-running lead managers including Kotak, Morgan Stanley, Bofa Securities, JM Financial, and Avendus Capital. According to details in the DRHP, SoftBank holds the largest external stake at 25.55%, followed by Mahindra & Mahindra and Premji Invest at 10.99% and 10.36% respectively.
FirstCry’s financial trajectory has displayed rapid growth over recent fiscal years, emerging as one of the few e-commerce entities to surpass the Rs 5,000 crore revenue milestone. The company’s revenue surged to Rs 5,632 crore in FY23 from Rs 2,401 crore in FY22. However, its losses ballooned six-fold to Rs 486 crore in FY23. In the first quarter of FY24, it reported revenue of Rs 1,407 crore and a loss of Rs 110 crore.
This IPO filing places FirstCry in the company of other loss-making firms entering the market; electric vehicle manufacturer Ola Electric and office space provider Awfis also filed DRHPs following reported losses in FY23 and the initial quarter of FY24.
