FirstCry refiles draft IPO papers after SEBI’s concern

Brainbees Solutions—the parent company of kids-focused omni-channel retailer FirstCry—has refiled its draft red herring prospectus (DRHP) just days after concerns around its numbers were raised by the Security Exchange Board of India (SEBI).

Last week, the firm withdrew its IPO papers as SEBI raised questions over key metrics it disclosed to investors as they had only provided financials up to the first quarter of financial year 2024. As per SEBI’s new rule introduced in 2022, an IPO-bound company must share all key business metrics that it has shared with prospective investors in the last three years.

In the refiled DRHP, FirstCry has disclosed the latest financials i.e. the first three quarters of FY24. The company’s revenue from operations was recorded at Rs 4814 crore while its net losses were Rs 278 crore till Q3 FY24.

It has also provided other details for that duration: the company had 8.80 million average unique transacting customers and 26.73 million orders with an average order value of Rs 2,554.

SoftBank-backed FirstCry IPO comprises 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. The latest DRHP has no change in the fresh issue and OFS.

FirstCry’s revenue from operations spiked more than 2X to Rs 5,632 crore during FY23 from Rs 2,401 crore in FY22. The Pune-based firm also reported a six-fold jump in its losses to Rs 486 crore in FY23. During Q1 FY24, it reported Rs 1,407 crore revenue and Rs 110 crore loss.

FirstCry is not the only company that had to refile draft IPO papers after SEBI’s intervention. Earlier, insurtech company GO Digit refiled its prospectus over employee stock plans. Fintech firm MobiKwik and travel tech company TBO also refiled their draft papers with a reduced IPO size.