Pune-based infant products marketplace Firstcry is inching closer towards a public listing with the company just converting into a public company. Its board has passed a resolution to convert their entity from private to public, regulatory filings show.
Following the conversion, the company has been renamed to Brainbees Solutions Limited. The company also approved the reclassification and sub-division of equity and preference shares.
The SoftBank-backed firm also amended its ESOP plan.
According to an ET report, FirstCry is likely to file its draft red herring prospectus (DRHP) in the next few weeks. The company will raise around $1 billion. Only a fourth of the money raised will be towards fresh issue of equity, with the rest going towards an exit for existing investors. It may seek close to $7 billion valuation in the IPO.
In order to comply with the listing procedure, the Supam Maheshwari-led company also approved the capping of upto 49.5% for the shareholding and voting right of the non-resident investors. Hence, the non-resident investors have to waive their voting rights by 7.54% to ensure that the resident shareholder voting rights of the company exceeds 50%, separate filings show.
FirstCry’s IPO is coming at a time when most of the internet and new age companies have delayed their listing plans in the wake of poor performance post listing of storied companies including Paytm and CarTrade. Several companies including Delhivery, PharmEasy and Oyo postponed their plans but unlike them FirstCry is a profitable entity.
FirstCry had recorded an almost 2X jump in its operating revenue to Rs 1,603 crore in FY21 as compared to Rs 814 crore in FY20, its annual financial statements show. The company also posted a sizable profit of Rs 216 crore in the fiscal year ending March 2021.
It seems probable that by the time IPO time actually comes, the firm will have released its FY22 results too. The purported $7 billion valuation would indicate that growth has been healthy in FY22 as well. The firm has done very well to protect marketshare as well as margins in a high margin category like baby products, with a mix of acquisitions and organic growth.