FirstCry Files RHP With SEBI, Reduces Fresh Issue Size To INR 1,666 Cr

BrainBees Solutions Ltd, which operates omnichannel kidswear brand FirstCry, has filed its red herring prospectus (RHP) with the Securities and Exchange Board of India (SEBI).

As per RHP, the company’s initial public offering (IPO) will open on August 6 and close on August 8. The price band for the IPO will be announced on August 1.

The Pune-based company has reduced the size of its fresh issue by around 8% to INR 1,666 Cr from INR 1,816 Cr.

FirstCry is offering equity shares with a face value of INR 2 each, totaling up to INR 1,666 Cr, while the offer for sale (OFS) component comprises shareholders selling 5.4 Cr equity shares.

According to its RHP, FirstCry will use the net proceeds from the IPO for several key expenditures. The company plans to spend INR 108.1 Cr on setting up new modern stores under the ‘BabyHug’ brand (INR 93.9 Cr) and establishing a warehouse in India (INR 14.2 Cr).

Additionally, INR 93.1 Cr will be allocated for lease payments for existing identified modern stores owned and operated by the company in India.

Investment in the subsidiary Digital Age will total INR 299.6 Cr, with INR 169 Cr dedicated to setting up new modern stores under the FirstCry brand and other home brands, and INR 130.6 Cr for lease payments for existing identified modern stores owned and controlled by Digital Age in India.

For overseas expansion, FirstCry will invest INR 155.6 Cr in the subsidiary FirstCry Trading, which includes INR 72.6 Cr for setting up new modern stores and INR 83 Cr for establishing warehouses in KSA.

Furthermore, INR 169 Cr will be invested in the subsidiary GlobalBees Brands for acquiring an additional stake in step-down subsidiaries. The company will also allocate INR 200 Cr towards sales and marketing initiatives and INR 57.6 Cr for technology and data science costs, including cloud and server hosting-related expenses.

Lastly, funding for inorganic growth through acquisition is also planned, although a specific amount is not mentioned.

FirstCry’s initial offer size was INR 1,816 Cr, as per its draft red herring prospectus (DRHP). The Supam Maheshwari-led ecommerce unicorn first filed its DRHP in December.

Later, it refiled its DRHP after markets regulator Securities and Exchange Board of India (SEBI) claimed that the Supam Maheshwari-led startup failed to disclose certain key indicators in its draft papers filed last December.

The company reported a revenue of INR 6,481 Cr in FY24, up 15% from INR 5,633 Cr in FY23, as per filings. It narrowed its losses to INR 321 Cr in FY24, down 34% from INR 486 Cr in FY23.