Unpacking FirstCry IPO details that opens on August 6

BrainBees Solutions Ltd, the parent company of FirstCry, will open its initial public offering on August 6 and close on August 8, according to the company’s red herring prospectus (RHP).

As per reports, FirstCry will seek a valuation in the range of $2.9-3 billion in its public listing. In its refiled DRHP, FirstCry disclosed that its IPO comprised a fresh issue of equity shares aggregating up to Rs 1,666 crore and an offer for sale (OFS) of up to 54,391,592 equity shares.

Based on the numbers, FirstCry will be seeking around 3.5X revenue multiples in terms of valuation, as its total revenue surpassed Rs 6,500 crore in FY24. While its valuation has tempered the expectations of many, experts suggest that a lower valuation could be a good move and attract the attention of both institutional and retail investors.

Who is selling in the IPO?

FirstCry offers for sale (OFS) comprising 5,43,91,592 shares, out of which SoftBank will offload 37.35% of the total OFS. M&M (Mahindra and Mahindra), Premji Invest, TPG Growth and NewQuest Asia are some other investors who will take part in the OFS.

The company is likely to finanlised the price band on Thursday (August 1).

FirstCry’s current cap table 

SoftBank is the largest shareholder in FirstCry with 25.53% stake followed by Mahindra & Mahindra and Premji Invest which hold 10.97% and 10.36% stake respectively. The company’s founder Supam Maheshwari has 6% stake while the entire ESOP pool forms 8.4% of the cap table.

Financial performance (FY24)

FirstCry’s revenue from operations increased by 15% to Rs 6,481 crore in FY24 from Rs 5,633 crore in FY23. The sale of its products through its offline stores and website was the primary source of revenue for FirstCry in the last fiscal year. Notably, its subsidiary GlobalBees contributed Rs 1,209 crore income to the overall revenue.

As per the company’s DRHP, it had 1,018 offline stores across the country out of which 632 were franchise-owned while remaining owned by the company until the end of the last calendar year (2023).

The Pune-based firm managed to control its losses by 34% to Rs 321 crore in FY24 with an improved EBITDA margin.

FirstCry will become the second SoftBank-backed company after Ola Electric to launch an IPO around the first week of August. The Bhavish Aggarwal-led company had set the date of August 2 for opening the issue which will be closed on August 6.