FirstCry files DRHP; SoftBank claims 37.35% of total OFS

Brainbees Solutions, the parent company of kids-focused omnichannel retailer FirstCry, has filed a draft red herring prospectus (DRHP) with the Security Exchange Board of India (SEBI) for an initial public offering (IPO). 

The company has proposed to raise funds through a fresh issue of equity shares aggregating up to Rs 1,816 crore and an offer for sale (OFS) of up to 54,391,592 equity shares.

Out of the complete OFS, 37.35% of shares will be offloaded by SoftBank i.e. 20,318,350 equity shares. Mahindra & Mahindra, Premji Invest, New Quest Asia, Apricot Investments, Valiant Partners, TIMF Holdings, Think India Opportunities, and Schroders Capital will also divest their shares in the OFS.

In the DRHP, FirstCry says it will utilize the proceeds for setting up modern stores, warehouses, investment in its subsidiaries, technology and data science, marketing, acquisitions, and general corporate purposes.

Kotak, Morgan Stanley, Bofa Securities, Jm Financial, and Avendus Capital are the book-running lead managers of the issue. According to the DRHP, SoftBank is the largest external stakeholder with 25.55% followed by Mahindra & Mahindra and Premji Invest which commands 10.99% and 10.36% respectively.

FirstCry has been growing at a rapid clip in the past few fiscal years and it’s one of the handful of e-commerce firms to cross Rs 5,000 crore income mark. Its revenue from operations jumped to Rs 5,632 crore during FY23 as compared to Rs 2,401 crore in FY22. However, the firm reported a six-fold jump in its losses to Rs 486 crore in FY23. During Q1 FY24, it reported Rs 1407 crore revenue and Rs 110 crore loss.

FirstCry will be the third loss making company to file DRHP this month. Electric vehicle manufacturer Ola Electric and office space provider Awfis filed their DRHPs after posting losses in FY23 and the first quarter of FY24.