FirstCry IPO: Everything You Need to Know Before Investing
Introduction
FirstCry, operated by Brainbees Solutions Limited, is ready to launch its initial public offering (IPO) on 6th August, 2024. The offer consists of a fresh issue and an offer for sale. With D-street all set for this IPO, here is some crucial information that you need to know before investing in it.
Company overview
Brainbees Solutions Limited is India's premier multi-channel retailing platform for products for mothers, babies, and kids. It launched FirstCry in 2010 to create a one-stop destination for parenting needs across content, commerce, community engagement, and education.
Across its platform, you will find products from third-party Indian brands, global brands, and home brands. Through its deep insights and understanding of its customers, it has created trusted home brands in the categories of mothers’, babies’, and kids' products.
Market position and business model
The company is India's largest multi-channel retailing platform for mothers, babies and kids' products, in terms of GMV, for the year ending December 2023, according to the RedSeer Report. Its GMV increased to ₹7,257.634 crores in the financial year 2023 from ₹3,985.844 crores in the financial year 2021.
As of December 31, 2023, it had a network of 1,018 modern stores in India. It has a multi-channel business model, which the company believes will enable it to deliver superior operating margins and give it a competitive advantage.
Financial performance
The table captures some vital metrics that will help you understand the company’s financial performance:
| Particulars | FY 23 | FY 22 | FY 21 |
|---|---|---|---|
Total equity and liabilities (in ₹crores) | 7119.827 | 6197.163 | 4078.171 |
Total income (in ₹ crores) | 5731.276 | 2516.916 | 1740.059 |
Total expenses (in ₹crores) | 6315.667 | 2568.060 | 1645.300 |
Diluted earnings per share | (9.97) | (1.74) | 5.73 |
Return on net worth | (12.76%) | (2.04%) | 6.25% |
IPO details
Here are the key details of the FirstCry IPO:
| Particulars | IPO Details |
|---|---|
IPO opens on | 6th August |
IPO closes on | 8th August |
Price band | ₹440 to ₹465 |
IPO size | ₹4193.73 crores in the upper price band |
Lot size | 32 shares |
Minimum investment | ₹14880 |
Equity shares aggregates up to | ₹1816 crores |
Equity shares for offer for sale | Up to 54,391,592 equity shares |
Book running lead managers | Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, BofA Securities India Limited, JM Financial Limited and Avendus Capital Private Limited |
IPO registrar | Link Intime India Private Limited |
Use of IPO proceeds
The company aims to use the IPO proceeds to:
- Set up new modern stores under the BabyHug brand
- Set up a warehouse in India
- Invest in its subsidiary, FirstCry Trading, for overseas expansion
- Invest in its subsidiary Globalbees Brands
- Undertake sales and marketing initiatives
- Meet expenditure for lease payments for its existing identified modern stores owned and operated by in India
- Invest in its subsidiary, Digital Age
- Meet technology and data science costs, including cloud and server hosting-related costs
Investment rationale
India is among the youngest nations in the world, with 306 million children between the ages of 0 and 12 as of CY2023. The growth in per capita spending on childcare products in India is projected to be among the fastest globally. This is driven by increasing awareness of childcare, child health and wellness, rising disposable incomes, and shifting customer perceptions.
The childcare products market in India is estimated to grow at a CAGR of 13-14% from ₹2,846 billion (approximately US$36 billion) in CY2023 to reach ₹5150-5450 billion (approximately US$64-68 billion) by CY2028, with multi-channel retailers playing an integral role.
FirstCry is the pioneer of multi-channel retailing for mothers, babies and kids’ products in India, with over 1.99 million square feet of retail space and 1018 modern stores in 508 cities as of December 31, 2023.
Risks and challenges
Certain risks associated with FirstCry are as follows:
- Its technology infrastructure is susceptible to disruptions, failures, security breaches and cyberattacks
- Failure to retain relationships with third-party brands and attract new relationships can adversely affect its cash flow
- The company has incurred certain indebtedness, and its lenders have imposed certain restrictive conditions on it under its financing arrangements
How to apply for FirstCry IPO?
To apply for FirstCry IPO:
- Use your credentials and log into the Demat account you have with Kotak Securities
- Go to the current IPO section and select FirstCry IPO
- Input the number of lots and the price
- Enter your UPI ID and click on submit to place your bid with the exchange
- Approve the notification received on your UPI app to block funds
Conclusion
Before investing in any IPO, it’s crucial to do your homework. Read the company’s red herring prospectus for detailed insights into various aspects. Also, make sure you are comfortable with the risks and do a thorough SWOT analysis before proceeding.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.
