Business magnate Ratan Tata plans to divest all 77,900 of his shares in the e-commerce platform FirstCry IPO. In 2016, Tata acquired a 0.02 percent stake for ₹66 lakh in Brainbees Solution, a company that runs omnichannel kidswear businesses under the FirstCry brand.
The parent company of FirstCry, Brainbees Solutions, filed a draft red herring prospectus (DRHP) with the capital markets regulator, the Securities and Exchange Board of India (SEBI). The IPO entails issuing new equity shares valued at ₹1,816 crore in addition to an offer for sale by current shareholders and promoters.
Current investors in Brainbees, such as Mahindra & Mahindra (M&M), SoftBank, NewQuest Asia, and the private equity firm TPG, intend to sell a combined 5.44 crore shares through an Offer for Sale (OFS) in conjunction with the main offering.
SoftBank is the main shareholder of the unicorn in online e-commerce, FirstCry, with the largest stake (25.5%). The document states that Mahindra will sell its 0.58% ownership in the parent company and SoftBank will sell its 2.03 crore shares.
FirstCry may think about a private placement of shares to specific investors for up to ₹363.20 crore, according to the DRHP. FirstCry provides mothers, babies, and children with toys, clothes, and accessories via their physical and online stores.
Although Firstcry has not yet disclosed the dates of the IPO subscription’s opening and closing in its DRHP, several media reports indicate that the public offering will begin in early 2024. The IPO price band and offer price for the issue have not yet been disclosed.
The net proceeds will be used per the DRHP to open new retail locations, warehouses, and international expansion. The registrar of the offer is Link Intime India Private Limited, while the book-running lead managers are Kotak, Morgan Stanley, Bofa Securities, JM Financial, and Avendus.
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What will FirstCry do with the money from the IPO?
The following are FirstCry’s planned uses of the Net Proceeds:
1. Outlay for:
• Establishing new stores and warehouses
• Rent payments for the Indian stores that are currently identified
2. Investment in FirstCry Trading, a subsidiary, to expand internationally by:
• Establishing new stores and warehouses in Saudi Arabia
3. Contributing to Globalbees Brands to obtain a bigger share in indirect subsidiaries.
4. Marketing and sales campaigns
5. The cost of technology and data science, including charges for server and cloud hosting.
6. Financing general corporate objectives, acquisitions, and other strategic initiatives that lead to inorganic growth.
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