 "FirstCry IPO to open on Tuesday; sets price band at Rs 440-465 per share")
Brainbees Solutions, which operates omnichannel businesses of kidswear under the brand name FirstCry, will launch its Rs 4,193 crore initial public offering (IPO) on August 6. The company has set the price band of Rs 440-465 per share. At the top end, the retailer will be valued at Rs 24,142 crore.
The IPO comprises fresh fundraise worth Rs 1,666 crore and the secondary share sale worth Rs 2,528 crore.
The selling shareholders are SoftBank, Mahindra & Mahindra, Premji Invest and TPG.
FirstCry will use the IPO proceeds to set up new stores, digital expansion, and expansion in Saudi Arabia. In FY24, the company reported revenues from operations worth Rs 6,480 crore and Rs 321 crore loss.
The company founded in 2010, raised funds from private investors in 2018.
The company is being valued at around $2.8 billion, almost similar to its valuation of $2.7 billion in 2023, according to Tracxn, a market intelligence platform.
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Supam Maheshwari, chief executive officer and managing director of FirstCry, said the decision on the valuation was taken after discussion with investors and bankers based on investors’ appetite.
He added that the fresh issue size was reduced based on capital needs.
“We realised that we do not need so much money. The last funds were raised in December of 2018. Hence, we reduced the IPO size as there was no point in just raising funds and keeping it in the bank,” said Maheshwari, in an interaction after the IPO announcement.
Schroders Capital is the only investor exiting FirstCry.
FirstCry reported revenue of Rs 6,408.8 crore for the financial year ended March 31, 2024, up 15 per cent year-on-year (Y-o-Y). The company incurred a net loss of Rs 321.5 crore for the FY24.
When asked why the company has not become profitable even after 14 years, Maheshwari added: “It takes time to build a sustainable business model in India. It is one of the toughest countries even in retail. It is highly segmented and then to build moats from scratch takes time to build a profitable model.”