Pune-based BrainBees Solutions Limited, the parent entity of the omnichannel marketplace FirstCry, has filed a draft red herring prospectus (DRHP) with the market regulator SEBI. Led by Supam Maheshwari, the ecommerce unicorn is seeking to raise INR 1,816 crore through fresh issues of shares.
The offering also encompasses an offer-for-sale (OFS) segment involving 5.4 crore equity shares. SoftBank from Japan, holding a stake of over 25%, will be the most significant seller, divesting up to 2 crore equity stakes. Additionally, Premji Invest is set to sell 8.6 million shares in the OFS. Founder Supam Maheshwari will also part with his stake in the IPO.
The startup intends to use the net proceeds from the IPO for the following purposes:
The allocation of funds, amounting to INR 648 crore, will cover the costs associated with setting up new contemporary stores and warehouses. Moreover, it will address lease payments for the existing modern stores in India.
The company intends to invest INR 155.6 crore in its subsidiary, FirstCry Trading, to facilitate overseas expansion through the establishment of new modern stores in Saudi Arabia.
An investment of INR 170.5 crore will be made in the subsidiary Globalbees Brands to acquire an additional stake in the company’s indirect subsidiaries.
An investment of INR 100 crore will be directed towards sales and marketing initiatives.
Technology and data science cost of INR 57.6 Cr.
The remaining funds will be allocated to support inorganic growth through acquisitions, other strategic initiatives, and general corporate purposes.
The company is considering a pre-IPO private placement of equity shares to specific investors, aiming to raise up to INR 363 crore. The funds generated in the pre-IPO round will be subtracted from the fresh issue.
For the quarter concluding on June 30, 2023, the company incurred a loss of INR 110 crore. As of June 30, 2023, the startup boasted 8.25 million annual unique transacting customers.
In the financial year 2023, FirstCry witnessed a significant increase in net loss, soaring over 500% to INR 486 crore from INR 78.6 crore in the preceding fiscal year. It’s noteworthy that the startup had achieved a net profit of INR 215.9 crore in FY21. Additionally, the startup recorded sales of INR 5,632.5 crore in FY23, marking a 135% rise from INR 2,401.2 crore in FY22.
FirstCry’s consolidated financials comprise the financial performance of its 38 subsidiaries, including Globalbees.