Brainbees Solution, operating the kidswear omnichannel platform FirstCry, has initiated the filing process for its IPO with Sebi, though the IPO’s exact size remains undisclosed. The IPO comprises a fresh issuance of shares valued at up to Rs 1,816 crore, inclusive of an offer for sale (OFS) section involving the divestment of up to 54.4 million shares by existing stakeholders like SoftBank, Mahindra & Mahindra (M&M), and the US private equity fund TPG.
According to sources, SoftBank-operated SVG Frog plans to sell 2.03 crore shares, while M&M aims to divest up to 28.06 lakh shares in the IPO. A roster of other selling shareholders includes PI Opportunities Fund, TPG, NewQuest Asia, Apricot Investments, Valiant Mauritius Partners, TIMF Holdings, Think India Opportunities Master Fund, and Schroders Capital Private Equity Asia.
SoftBank maintains its position as FirstCry’s principal shareholder, currently holding a 25.5% stake, followed by M&M with a 10.98% stake. Notably, individual shareholders, including Ratan Tata and FirstCry’s Co-Founder and CEO Supam Maheshwari, are also part of the selling stakeholders.
Ratan Tata, holding 77,900 shares acquired at an average cost of Rs 84.72 per share, is set to sell his entire stake in the IPO, amounting to roughly Rs 66 lakh. Conversely, Maheshwari plans to divest 18.24 lakh shares from his existing 2.89 crore shares.
The raised capital from the IPO is earmarked for several key areas including the establishment of new modern stores, warehouse operations, lease payments for existing stores, sales and marketing endeavors, technology and data science expenditures, funding for potential acquisitions, and strategic initiatives. A portion of the proceeds is also dedicated to international expansion plans in Saudi Arabia.
The IPO’s book running lead managers comprise Kotak Investment Banking, Morgan Stanley, BofA Securities, JM Financial, and Avendus.
In FY23, FirstCry saw its consolidated net loss widen to Rs 486.05 crore while achieving consolidated revenue growth of over two-fold, reaching Rs 5,632.53 crore. This was a significant increase from its net loss of Rs 78.68 crore and revenue of Rs 2,401.28 crore in FY22.
SoftBank’s previous investment of $400 million in FirstCry at an enterprise valuation of $900 million and its subsequent share sale worth $310 million this week have been pivotal financial transactions. Additionally, Brainbees owned 936 modern stores as of June 30, 2023, and has plans to expand by adding 336 new BabyHug brand stores and 147 FirstCry brand stores over the next three fiscal years.
