FirstCry intends $1 billion IPO, may seek Sebi nod next month
Even as some of the top-tier startups are delaying their initial public offering (IPO) plans amid a wider economic uncertainty, ecommerce firm FirstCry is going ahead with its $1 billion IPO and will file its draft papers next month, people briefed on the matter
Initially, the Pune-based etailer, backed by SoftBank and Premji Invest, was considering a $600-700 million IPO, but has now decided to increase the offer size to as much as $1 billion. The company feels the market sentiment will be better and there will be enough appetite for good companies among public market investors by the time it can list here in the second half of the year, the people said.
The ecommerce firm that sells baby-care products is likely to offer fresh shares as well as shares held by some of the existing investors in the IPO, with the latter being around 75% of the total issue size, the people added. This means the primary share sale in FirstCry IPO would be around $250 million. Proceeds from the sale of shares by existing investors won’t go to the company.
As it gears up to file draft papers with market regulator Securities and Exchange Board of India (Sebi), the company has also finalised the board approvals to convert itself into a public limited company from being a private limited company. This is a formal process required to be followed before seeking Sebi nod.
“They (FirstCry) have now finalised plans to make this a $1 billion issue size. The board approval is also in place where FirstCry parent Brainbees Solution has been converted to a public Ltd firm,” a person aware of the matter said.
FirstCry turned profitable in fiscal year 2021, as per recent regulatory filings, clocking a net profit of nearly Rs 216 crore compared with a loss of Rs 191 crore in the previous year. FirstCry reported operational revenue of Rs 1,603 crore in FY21, compared with Rs 814 crore the year before.
Started in 2010, Supam Maheshwari-led FirstCry may seek a valuation of close to $7 billion for its debut on Dalal Street, people aware of the matter said.
“The company being profitable will lead to FirstCry being able to seek a premium on valuation amid broader correction in late-stage, new-age companies. According to internal estimates, it plans to report an increased profit in the fiscal year of 2022,” this person said. The most updated financials of the company will reflect in its draft red herring prospectus (DRHP).
When contacted, FirstCry’s Maheshwari declined to comment on the IPO plans.
As per a report FirstCry’s $240 million secondary funding deal with Indian sovereign wealth fund National Investment and Infrastructure Fund had fallen through. Existing investor Premji Invest was likely to step in and buy more in the company, the paper had reported.
Prior to the deal falling through, FirstCry had conducted a $315-million secondary share sale in March last year. SoftBank is its largest investor with an over 30% stake in the omni-channel etailer. It was last valued around $2.3-2.5 billion. It has around 600 stores in India and also has a presence in the UAE.
