FirstCry‘s parent company, Brainbees Solutions, saw its shares drop over 5% after the Mumbai GST department launched an investigation into its tax practices.
Brainbees Solutions’ shares at INR 592.85
By 3 PM, Brainbees Solutions‘ shares were trading at INR 592.85 each, down 5.26% from the previous day. The company confirmed that Mumbai state tax officials searched and inspected its Pune headquarters and a warehouse in Bhamboli, Maharashtra, on November 6.
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Meanwhile, the company said the investigation was done under sections 67(1) and 67(2) of the Maharashtra GST Act, 2017. Brainbees assured investors that they are fully cooperating with the GST authorities and providing all necessary clarifications. They also mentioned that the company’s operations are not affected by the ongoing probe.
FirstCry debuts on BSE, NSE in August 2024
According to INC42, the brand released a statement regarding the investigation, saying, “We would like to emphasise that the company has always maintained high standards of integrity, corporate governance, and compliance in all aspects of its operations, including the prompt payment of applicable taxes. We remain committed to upholding these standards.”
Further, the income tax department sent notices to the company earlier this year, questioning expenses of ₹79.7 crore related to employee stock options for the years 2018-2022.
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Started in 2010 by Supam Maheshwari and Amitava Saha, FirstCry is a marketplace for baby and kids products, operating both online and in physical stores. In August this year, it was listed on the BSE and NSE, debuting at a 34% and 40% premium respectively.
In the first quarter of FY 2024-25 (Q1 FY25), Brainbees Solutions reduced its consolidated net loss by 31% to INR 75.68 crore from INR 110.42 crore in the same period last year. The company’s operating revenue increased by 10% to INR 1,652.07 crore, compared to INR 1,496.93 crore in Q1 FY24.
