What You Must Know About Firstcry IPO: Price Band ₹440 to ₹465 Per Share

About FirstCry (Brainbees Solutions Limited)

Founded in 2010, Brainbees Solutions Limited, through its online platform 'FirstCry', has become a go-to destination for mothers, babies, and kids. With a mission to create a comprehensive store for parents' retail, content, community engagement, and education needs, FirstCry offers a vast range of products for infants up to 12-year-olds, including apparel, footwear, baby gear, nursery items, diapers, toys, and personal care. The platform features over 1.5 million SKUs from more than 7,500 brands, encompassing Indian third-party brands, global brands, and its own house brands. Among these house brands is BabyHug, recognized as India's largest multi-category brand for mother, baby, and kids products in terms of GMV for 2023, according to a RedSeer report.

Other notable house brands include Pine Kids, Cute Walk by BabyHug, and Babyoye. Brainbees Solutions (FirstCry) also stands as the largest specialized online retail platform for maternal, baby, and kids' products in the UAE, again in terms of GMV for 2023. Demonstrating robust brand awareness and customer trust, the company has built a network of over 900 contract manufacturers in India and abroad, excluding those engaged by Globalbees Brands and its subsidiaries, to support its extensive product line. By the end of 2023, Brainbees Solutions employed a dedicated team of 3,411 full-time employees and 2,475 contract employees, solidifying its position as a leader in the maternal and child retail market.

Highlights of FirstCry IPO

Here are some highlights of the FirstCry IPO on the segment of the National Stock Exchange (NSE).

• Brainbees Solutions (FirstCry) IPO  is a book-built issue, including a fresh issue of ₹1,816.00 crore and an offer for sale of 5.44 crore shares.

• The IPO subscription period is from August 6, 2024, to August 8, 2024, with the allotment expected to be finalized on August 9, 2024.

• The IPO will list on the BSE and NSE, with a tentative listing date of August 13, 2024.

• Kotak Mahindra Capital, Morgan Stanley India, Bofa Securities India, JM Financial, and Avendus Capital are the book-running lead managers, while Link Intime India is the registrar.

• The face value of each share is ₹2, FirstCry IPO price bands is between ₹440 to ₹465 per share and total issue size 90,187,690 shares (aggregating up to ₹4,193.73 Cr).

• The pre-issue shareholding is 448,165,900 shares, and the IPO issue type is a Book Built Issue IPO.

• The IPO of Brainbees Solutions Ltd will be listed on the IPO segment of NSE SME.

FirstCry IPO (Brainbees Solutions) - Key Dates

Here are key dates pertaining to the IPO.

Data Source: Company RHP

In ASBA applications, there is no refund concept. Total application amount is blocked under ASBA (applications supported by blocked amounts) system. Once allotment is finalized, only amount is debited to extent of allotment made & lien on balance amount is automatically released in bank account. Credit of shares to demat account on Aug 12th 2024, will be visible to investors under ISIN Code. This credit to demat account is only applicable to extent of allocation of shares & if no allocations are made in IPO, then no credit would be visible in demat account.

Brainbees Solutions (FirstCry) Capital History

The equity capital history of FirstCry includes multiple significant events. It began with initial subscriptions in May 2010, where Supam and Sampada Maheshwari were allotted 10,000 shares. Subsequent allotments and buy-backs occurred from 2011 to 2013, including further issues to various investors such as Amitava Saha, SAIF Partners India IV Ltd., and others. Notably, there was a sub-division of shares in March 2017, changing the face value from ₹10 to ₹5. The company also issued a substantial number of Series E Equity Shares to SVF Frog (Cayman) Ltd. in January 2019. In 2020 and 2021, buy-backs and further issues continued, including significant allotments to BEWT and PI Opportunities I. In 2022, the company re-classified Series A and E shares into ordinary equity shares, followed by a sub-division from ₹5 to ₹2. The most recent notable event was the allotment of 14.9 million shares to the Brainbees ESOP Trust in December 2023 at a price of ₹243.72 per share.

Brainbees Solutions IPO Allocation & Minimum Investment Lot Size

The Brainbees Solutions IPO allocates its shares as follows: at least 75% of net offer is reserved for Qualified Institutional Buyers (QIBs), no more than 10% is allocated for retail investors, & at least 15% is reserved for Non-Institutional Investors (NIIs).

Data Source: Company RHP

The Brainbees IPO allows investors to bid for a minimum of 195 shares, with bids in multiples of this amount. Retail investors can invest a minimum of ₹14,820 for 195 shares & up to a maximum of ₹192,660 for 2,535 shares. Small High Net Worth Individuals (S-HNI) can invest from ₹207,480 for 2,730 shares to ₹992,940 for 13,065 shares. Big High Net Worth Individuals (B-HNI) have a minimum investment of ₹1,007,760 for 13,260 shares.

There are no upper limits for investments by HNIs / NIIs in IPO of Brainbees Solutions Ltd.

Check Firstcry IPO Anchor Allocation

Strengths and Risks of Brainbees Solutions IPO

Brainbees Solutions (Firstcry)'s mission is to create a one-stop store for parents' retail, content, community engagement, and education needs.

Strengths

•   India’s Largest Multi-Channel Retailing Platform: FirstCry is the largest multi-channel, multi-brand retailing platform for mothers', babies', and kids' products in India, with a GMV of ₹72,576.34 million in FY 2023, up from ₹57,994.63 million in FY 2022 and ₹39,858.44 million in FY 2021. The platform's extensive reach and large parenting community contribute to its success.

•  Powerful Network Effects Driven by Content and Data: FirstCry's content-led strategy engages parents early in their parenting journey through a comprehensive parenting platform featuring video and written content from parents, doctors, gynecologists, and nutritionists. This organic content generation fosters a virtuous cycle of customer acquisition and enriched platform content, helping identify product and pricing gaps.

•  Strong Brand Affinity and Customer Loyalty: The brand affinity and trust built by FirstCry attract and retain customers, increasing platform traffic. Leveraging its strong brand, FirstCry expands into select international markets and adjacent categories such as education, enhancing brand visibility and customer base.

•  Diverse Product Offering from Home and Third-Party Brands: FirstCry offers a variety of products through its online platform and modern stores, including global and domestic brands like Medela, Chicco, Mee-Mee, and Funskool, as well as products from "mompreneurs" and its own home brands. This diverse product range caters to a broad customer base across India, UAE, and KSA.

Risks

•  Operational and Financial Risks: FirstCry's historical performance may not reflect future growth or financial results, and it may face challenges in maintaining historical growth rates and executing strategies. Additionally, material uncertainties have been observed by auditors regarding the going concern status of FirstCry Retail DWC LLC, and restrictive conditions imposed by lenders could limit business flexibility.

•  Regulatory and Compliance Risks: FirstCry has previously failed to comply with certain provisions of the Companies Act 2013 and had to address these non-compliances. The company cannot guarantee that there will be no future non-compliances, which could affect operations and reputation.

•  Financial Risks: FirstCry has experienced negative net cash flows in the past, and future negative cash flows could adversely impact its consolidated financial condition. Moreover, some subsidiaries have unsecured loans that can be recalled at any time, potentially leading to liquidity issues.

• Business and Legal Risks: The company does not have exclusive arrangements with third-party brands, posing a risk if these brands terminate their relationship with FirstCry. Additionally, outstanding litigation against the company and its subsidiaries could harm reputation and financial health, and the business depends heavily on the performance of highly-qualified personnel.

Check Brainbees Solutions (Firstcry) IPO Subscription Status

Financial Highlights: Brainbees Solutions Ltd (Restated Consolidated)

The table below captures the key financials of Brainbees Solutions Ltd for the last 3 completed financial years.

This substantial growth in assets suggests that the company has been expanding its resource base significantly, indicating potential for growth and increased capacity.

While there has been impressive revenue growth overall, the recent decline signals potential challenges in maintaining revenue momentum or market conditions affecting sales.

The drastic shift from profitability to significant losses suggests severe operational issues or increased costs, impacting the company's financial health and profitability.

The slight reduction in net worth indicates a decrease in the company's equity, possibly due to losses or increased liabilities, affecting overall financial stability.

The reduction in reserves and surplus reflects a decrease in retained earnings and accumulated reserves, which may impact the company’s ability to absorb future financial shocks.

The significant increase in borrowing indicates a higher level of debt, which could affect financial stability and increase interest obligations, potentially leading to greater financial risk.