Pune-based Brainbees Solutions, the parent company of the popular online e-commerce platform FirstCry, has recently submitted an application for an initial public offering (IPO) to the Securities and Exchange Board of India (Sebi).
Brainbees Solutions aims to raise Rs 1,816 crore through a primary issue, as indicated in its Draft Red Herring Prospectus (DRHP).
The company plans to utilize these funds for strategic initiatives such as opening new stores, expanding its warehousing capabilities, and venturing into international markets. The IPO is a significant step in FirstCry’s growth trajectory, as it prepares to further establish its presence in the competitive e-commerce sector.
In addition to the primary issue, existing investors, including automotive giant Mahindra & Mahindra (M&M), private equity firm TPG, NewQuest Asia, and SoftBank, are collectively set to sell a substantial 5.44 crore shares in Brainbees through an Offer for Sale (OFS).
While specific share price details are yet to be unveiled, industry insiders quoted in a moneycontrol.com report suggest that FirstCry is targeting a valuation in the range of $3.5-3.75 billion for its IPO.
The DRHP outlines that besides M&M and SoftBank, other prominent entities such as Apricot Investments, Valiant Mauritius, TIMF, Think India Opportunities Fund, Schroders, and PI Opportunities will also sell a stake in FirstCry. M&M plans to sell a 0.58 percent stake, equivalent to 28 lakh shares, in Brainbees Solutions.
At the same time, SoftBank is expected to offload a significant 2.03 crore shares as it looks to adjust its holdings in the e-commerce major.
In a recent secondary transaction, SoftBank had reportedly sold shares worth Rs 630 crore in FirstCry, with buyers including the family offices of cricket legend Sachin Tendulkar, Infosys co-founder Kris Gopalakrishnan, and Ravi Modi of Manyavar, among others.
FirstCry’s consolidated net loss expanded sixfold from Rs 79 crore in FY22 to Rs 486 crore in FY23, according to regulatory filings. However, the company witnessed an impressive 135 per cent increase in consolidated revenue, reaching Rs 5,633 crore. This revenue milestone places FirstCry among the rare startups boasting revenues exceeding Rs 5,000 crore.
The IPO will be led by financial institutions, including Kotak Mahindra Capital, Morgan Stanley, BofA Securities, JM Financial, and Avendus. The filing mentions that FirstCry may consider a private placement of shares to certain investors for up to Rs 363.20 crore.
