The SoftBank-backed firm FirstCry has submitted its draft red herring prospectus (DRHP) in an effort to raise an additional Rs 1,816 crore through new share offerings and an OFS (offer for sale) component of up to 5.43 crore shares. In order to raise an additional Rs 363 crore, it proposes to conduct a pre-IPO private offering of equity shares. The money received will go towards the IPO's net revenues, which will fund business growth, investments, and marketing campaigns.
As per the draft, in April, FirstCry was valued at $3 billion. SoftBank held the highest share at 25.5%. As a part of the OFS component of the public issue, SoftBank will sell up to 2 crore shares. Other stakeholders such as Mahindra & Mahindra, Premji Invest, TPG, Apricot Investments, and NewQuest will also divest their stakes in the IPO.
FirstCry is planning to utilize Rs 648 crore from the IPO proceeds to establish modern stores and warehouses, as well as to cover lease payments for existing stores. The startup also has plans to invest Rs 155.6 crore in its foreign subsidiary for global expansion, specifically setting up modern stores in Saudi Arabia.
FirstCry plans to allocate Rs 170.5 crore to its subsidiary Globalbees Brands in order to take over an additional stake in the company's indirect subsidiaries. Also, Rs 100 crore will be allocated for sales and marketing initiatives and INR 57.6 crore in technology and data science.
The remaining IPO proceeds, as outlined in the DRHP, will be directed towards inorganic growth and other corporate purposes. In FY23, FirstCry reported a net loss of over 500 percent, amounting to Rs 486 crore, compared to Rs 78.6 crore in the previous fiscal year. FirstCry recorded net profit of Rs 215.9 crore in FY21, the startup witnessed a significant increase in sales, reaching Rs 5,632.5 crore in FY23, a 135 percent rise from Rs 2,401.2 crore in FY22.
Additionally, in the first quarter of FY24, FirstCry posted a net loss of INR 110.4 crore on consolidated sales totaling Rs 1,406.9 crore.
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