India’s FirstCry Set for IPO: Brainbees Aims to Raise Rs 1,816 Crore

Brainbees Solutions, the parent company of the well-known online retailer FirstCry, has officially filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on December 28, signaling its intent to go public. 

The Pune-based company aims to generate Rs 1,816 crore through a primary issue outlined in the DRHP. In addition to the fresh equity shares, existing stakeholders such as Mahindra & Mahindra (M&M), private equity firm TPG, NewQuest Asia, and SoftBank are set to collectively offer 5.44 crore shares in Brainbees through an Offer for Sale (OFS).

The IPO plans to involve the sale of up to 54.4 million shares, valued at ₹1,816 crore, providing an opportunity for both the company and existing investors. Brainbees Solutions intends to allocate the raised capital towards the expansion of its retail footprint, including the establishment of new stores and warehouses, as well as supporting international expansion efforts. 

Stakeholders, including SoftBank Vision Fund, Premji Invest, and Mahindra Retail, are expected to divest their holdings through the IPO, marking a notable development in the Indian e-commerce landscape.

FirstCry’s initial public offering (IPO) aspirations include raising a total of $500 million (approximately Rs 4,200 crore), with 60 percent of this amount designated for the offer for sale (OFS) segment, while the remaining 40 percent will constitute the primary component. 

The IPO listing is anticipated in 2024, providing ample time for strategic preparations. It was previously reported that the company officially submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) on December 28.

A significant portion, amounting to ₹170.5 crore, is set aside for acquiring an additional stake in Globalbees’ indirect subsidiaries to consolidate its presence in associated ventures. An infusion of ₹100 crore is dedicated to sales and marketing initiatives. Also, ₹57.6 crore is allocated to boost technology and data science capabilities, reflecting FirstCry’s emphasis on leveraging innovation for sustained growth.

The company’s recent financial disclosures reveal a major increase in net losses for the fiscal year, reaching ₹486 crore, a sixfold surge compared to the previous fiscal year’s figure of ₹79 crore. This loss surge comes alongside a strong performance in revenue from operations, witnessing a 135 percent surge from ₹2,401 crore to ₹5,633 crore for the fiscal year 2022-2023. 

Despite the widened losses, FirstCry remains strategically focused on utilizing the IPO funds to expand its retail footprint in India and Saudi Arabia and address lease commitments for existing stores in India. 

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