The initial public offering (IPO) of Brainbees Solutions, which runs omnichannel kidswear businesses under the FirstCry brand, is set to be launched on August 6. The IPO is a new issue of ₹1,666 crore and an offer for sale (OFS) of up to 5.4 crore shares by current shareholders, including M&M and SoftBank.
The anchor investor round will begin on August 4, a day before the IPO officially launches on August 5, according to the company’s red herring prospectus (RHP) submitted to market regulator Securities and Exchange Board of India. The price band will be disclosed later in the week.
Here are five key highlights from FirstCry IPO’s red herring prospectus
FirstCry IPO details
Brainbees Solutions (Firstcry) IPO will be open for subscription from August 6 to 8, 2024. The IPO of Brainbees Solutions is a book-built issue that includes a fresh issue amounting to ₹1,666.00 crore and an offer for sale of 5.44 crore shares.
Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Pvt Ltd, Bofa Securities India Limited, Jm Financial Limited, and Avendus Capital Pvt Ltd are the book-running lead managers for the Brainbees Solutions IPO. Link Intime India Private Ltd serves as the registrar for the issue.
The allotment for the Firstcry IPO is anticipated to be finalised on Friday, August 9. The IPO is scheduled to list on the BSE and NSE, with a tentative listing date of Tuesday, August 13.
FirstCry IPO offer for sale
Mahindra & Mahindra intends to offer up to 28.06 lakh shares in the IPO. SVF Frog, managed by SoftBank, will sell 20,318,050 shares. Other participants in the offer for sale (OFS) include PI Opportunities Fund, TPG Growth, NewQuest Asia, Apricot Investments, Satyadharma Investments, Schroders Capital, Sage Investment, and Pratithi Investment.
Ratan Tata, who acquired a 0.02 per cent stake in the startup for ₹66 lakh, plans to sell all 77,900 of his shares in the IPO. The average acquisition cost per share is ₹84.72, as stated in the RHP, making his total investment in the company approximately ₹66 lakh.
FirstCry financial results
In FY24, the company achieved a 15 per cent increase in operating revenue, reaching ₹6,481 crore, and reduced losses by 34 per cent to ₹321 crore during the same period. Over the past three financial years, its revenue from operations has grown significantly, from ₹2,401 crore in FY22 to ₹6,481 crore in FY24. Brainbees also reported that it is the largest multi-channel retail platform for products for mothers, babies, and kids, based on GMV, for FY24.
FirstCry IPO risk factors
- The company had negative net cash flows in the past and may continue to have negative cash flows in the future.
- The company will not receive any proceeds from the Offer for Sale portion, and the Selling Shareholders shall be entitled to the Offer Proceeds to the extent of the Equity Shares offered by them in the Offer for Sale.
Industry Overview
Between 2017 and 2020, the Indian retail market expanded at a compound annual growth rate (CAGR) of 12 per cent, reaching ₹62-64 trillion by the end of the financial year 2020. This significant growth was driven by increased consumption and income, the expansion of emerging and established income households, and rising demand from tier 2+ cities and towns, all supported by strong logistics infrastructure.
