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FirstCry, the popular online baby and kids store, is going public. Its parent company, Brainbees Solutions, has launched an IPO worth ₹4,193 crore. This means the company is offering the public a slice of its ownership for the first time. The IPO is open for subscription until August 8th. But remember, investing involves risks, so it’s always a good idea to do your homework before diving in.
First Cry IPO Details
| Offer Price | ₹440 – ₹465 per share |
| Face Value | ₹2 per share |
| Opening Date | 6 Aug 2024 |
| Closing Date | 8 Aug 2024 |
| Total Issue Size (in Shares) | 90,187,690 |
| Total Issue Size (in ₹) | ₹4193.73 Cr |
| Issue Type | Book Built Issue IPO |
| Lot Size | 32 |
| Listing at | BSE, NSE |
Brainbees is looking to raise a whopping ₹4,193.73 crore through its IPO. That’s a lot of money! To break it down, the company plans to bring in ₹1,666 crore by selling brand new shares to the public. This fresh cash will be used to fund the company’s growth plans.
Objectives of the IPO
- Establishment of new modern stores under the “BabyHug” brand and establishment of a warehouse in India
- Invest in lease payments for existing BabyHug stores.
- Fund Digital Age, a subsidiary, will open new FirstCry stores and invest in existing ones.
- Invest in FirstCry Trading, another subsidiary, to expand overseas with new stores and warehouses in KSA (Kingdom of Saudi Arabia).
- Increase ownership stake in Globalbees Brands, another subsidiary.
- Boost sales and marketing efforts.
- Upgrade technology and data science infrastructure.
- Pursue acquisitions and other strategic initiatives for growth.
- Cover general corporate expenses.
IPO Allocation of Shares
You can apply for a minimum of 32 shares in the FirstCry IPO. Brainbees Solutions, the parent company, is offering 90 million shares to the public.
Now, let’s break down who gets what. Big institutional investors, like insurance companies and mutual funds, have been allocated nearly 30% of the shares. Non-institutional investors, which include wealthy individuals and family offices, get around 15%. Retail investors like you and me have a slice of about 10%.
A small portion is reserved for company employees, and a big chunk is earmarked for anchor investors, typically large institutional investors who agree to buy shares before the IPO opens to the public.
| Investor Category | Shares Offered | Maximum Allottees |
| Anchor Investor Shares Offered | 40,555,428 (44.96%) | NA |
| QIB Shares Offered | 27,036,953 (29.98%) | NA |
| NII (HNI) Shares Offered | 13,518,476 (14.99%) | |
| bNII > ₹10L | 9,012,318 (9.99%) | 20,116 |
| sNII < ₹10L | 4,506,158 (5.00%) | 10,058 |
| Retail Shares Offered | 9,012,317 (9.99%) | 281,634 |
| Employee Shares Offered | 71,258 (0.08%) | NA |
| Total Shares Offered | 90,194,432 (100%) |
If there’s more demand than supply for shares (what companies usually hope for), things get a bit more complicated. Retail investors will get at least 32 shares each, while smaller and bigger non-institutional investors will get 448 shares. There’s no upper limit on how much big investors (HNIs and NIIs) can invest.
Grey Market Premium (GMP)
There’s a lot of buzz around the FirstCry IPO, and it’s showing in the grey market. This is an unofficial market where shares are traded before the official listing. Right now, people expect the FirstCry share price to be around ₹84 higher than its issue price when it finally lists on the stock exchange.
Subscription Status
The first day of the FirstCry IPO hasn’t seen a huge rush from investors. So far, only 3% of the shares on offer have been subscribed, so there’s still a long way to go before the issue is fully subscribed.
While retail investors have shown some interest, with 16% of their quota subscribed, institutional investors (especially the big players or QIBs) are yet to jump in. We’ll have to wait and see if there’s a surge of interest in the coming days.
Company Overview
Founded in 2010, FirstCry has grown rapidly to become a household name for parents. It sells everything from clothes and toys to baby gear and personal care products. The company boasts over 1.5 million products from 7,500 brands, including BabyHug.
FirstCry has a strong online presence but is expanding its offline footprint with BabyHug stores. The company has a large team of employees and contract workers dedicated to serving its customers.
Financials
While FirstCry has a strong brand and a large customer base, its financial health is a cause for concern. The company’s revenue increased by 15% in the last financial year to ₹6,575.1 crore. However, it also reported a loss of ₹321.5 crore. This is a significant jump from profit to loss.
Another red flag is the company’s debt. It has increased from ₹176.5 crore to ₹462.7 crore in a single year. This means the company is relying more on borrowed money to operate.
SWOT Analysis of Brainbees Solutions Limited
| STRENGTHS | WEAKNESSES |
|---|---|
| Strong brand recognition and reputation in the mother and baby care segment Extensive product portfolio with over 1.5 million SKUs Large and loyal customer base Established online presence with a strong mobile app Growing network of offline stores under the BabyHug brand Presence in the UAE, the largest specialized online retail platform for maternal, baby, and kids’ products | Recent losses despite increasing revenue Significant increase in debt Dependence on third-party manufacturers Limited international presence outside of the UAE |
| OPPORTUNITIES | THREATS |
| Growing demand for mother and baby care products in India and abroad Expansion into new product categories Leverage technology to improve customer experience and operational efficiency Increase market share in the offline retail segment Potential for further international expansion | Intense competition in the online retail space Economic downturns that could reduce consumer spending Fluctuations in the price of raw materials Government regulations impacting the retail sector |
FirstCry’s IPO is off to a start, with the company aiming to raise a significant amount of money to fuel its growth plans. While there’s been some initial interest from investors, the real test will be in the coming days as we see how the subscription unfolds. Whether it’s a blockbuster or a damp squib remains to be seen. Only time will tell if FirstCry can capitalize on its strong brand and market position to deliver solid returns for its investors.
*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
