FirstCry, a kids-focused omnichannel retailer, has made slight changes in the way it plans to utilize the capital raised from the fresh issuance of shares as part of its initial public offering (IPO), according to the unicorn’s updated DRHP filed with the Securities and Exchange Board of India.
The IPO offering, consisting of fresh shares valued at INR 1,816 Cr and an offer-for-sale (OFS) component of 5.4 Cr equity shares, remains consistent with the previous DRHP filed by the unicorn.
The company now plans to allocate the largest portion of the proceeds, totaling INR 388.2 Cr, for investment in its subsidiary Digital Age Retail, which is into multi-brand retailing and operates FirstCry’s online platform and mobile application.
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Out of the INR 388.2 Cr, GlobalBees, the parent company of FirstCry, intends to allocate INR 222.2 Cr for the establishment of new modern stores under the FirstCry brand and other company brands. Additionally, INR 166 Cr will be directed towards lease payments for existing stores owned and managed by Digital Age.
According to the company’s previous DRHP, FirstCry had proposed to utilize INR 648 Cr from the IPO proceeds for the establishment of modern stores and warehouses, as well as for lease payments for existing stores.
Nevertheless, the investment strategy for overseas expansion, totaling INR 155.6 Cr, remains unaltered. The startup will continue to allocate INR 83 Cr for establishing new warehouses in Saudi Arabia, along with INR 72.6 Cr for setting up modern stores in the country. However, specific details regarding the number of stores and warehouses planned for establishment were not provided.
Another investment that has experienced a minor adjustment from its previous IPO documents is directed towards its subsidiary Globalbees Brands’ acquisition of additional stake in the company’s step-down subsidiaries. The company will now invest INR 173.59 Cr, compared to the previously stated INR 170.5 Cr in the earlier DRHP.
It will allocate INR 150 Cr towards investment in sales and marketing initiatives, marking a 50% increase from the previously earmarked INR 100 Cr as per the earlier DRHP. Concurrently, INR 57.6 Cr will be allocated for technology and data science expenses.
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Additionally, the company will designate INR 140.7 Cr for establishing new modern stores and warehouses for its brand ‘BabyHug’. Under the BabyHug brand, FirstCry offers a range of products including clothing, baby gear, nursery items, diapering essentials, toys, and more, catering to the needs of babies.
As stated in the DRHP, the remaining IPO proceeds will be utilized to finance inorganic growth initiatives and other corporate purposes.
It’s worth noting that the startup resubmitted its DRHP following SEBI’s queries regarding the key metrics disclosed by FirstCry in its initial draft documents.
In the updated DRHP, the unicorn also revealed its financial figures for the first nine months of FY24. The omnichannel retailer recorded a net loss of INR 278.2 Cr for the nine-month period ending December 2023, with revenue totaling INR 4,814 Cr during the same duration.
