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Funding cycles come and go; great teams persist, compound value for shareholders: FirstCry’s Supam Maheshwari

Economic TimesEconomic Times · 11m ago
Funding cycles come and go; great teams persist, compound value for shareholders: FirstCry’s Supam Maheshwari
Medial

Indian retail brand FirstCry, operated by Brainbees Solutions, will launch its IPO on August 6, with a target of raising Rs 4,188 crore. CEO Supam Maheshwari discussed the company's journey, the changing IPO landscape for new-age firms, and plans for expansion. Despite market fluctuations, Maheshwari emphasized the importance of creating sustainable value and building a unique ecosystem story. FirstCry plans to open 350 stores over the next three years, invest in technology and manufacturing, and expand internationally. Maheshwari highlighted the significance of the omnichannel model and the growth potential in both online and offline retail. The company's brand aggregator platform, Globalbees, also showed positive financial performance.

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Early investors set to gain from new-age IPO windfall

Economic TimesEconomic Times · 11m ago
Early investors set to gain from new-age IPO windfall
Medial

Investors who got in early on the upcoming IPOs of FirstCry and Ola Electric could see significant returns. Companies like SoftBank, Tiger Global, Mahindra & Mahindra, and Matrix Partners India are expected to see their stock value surge by three to ten times. This means SoftBank's gains in FirstCry could exceed 3X based on its acquisition cost, while Mahindra & Mahindra could see a nearly 6X gain. Similarly, early backers of Ola Electric like Tiger Global and Matrix Partners India could achieve gains of more than 6X and nearly 10X, respectively. Latecomers may face notional losses due to moderated valuations. Founders of FirstCry and Ola Electric, Supam Maheshwari and Bhavish Aggarwal, are expected to accumulate significant wealth through the IPOs.

FirstCry raises $227 Mn from anchor investors ahead of IPO

EntrackrEntrackr · 10m ago
FirstCry raises $227 Mn from anchor investors ahead of IPO
Medial

BrainBees Solutions Limited, the parent company of FirstCry, has offered Rs 1,886 crore (approximately $227 million) worth of shares to 71 anchor investors as part of its initial public offering. The board at FirstCry has passed a resolution to offer 4,05,55,428 equity shares at an issue price of Rs 465 each (upper-band) to its anchor investors, its regulatory filing accessed from the Bombay Stock Exchange shows. SBI, Fidelity, Goldman Sachs, ICICI, HDFC, Kotak, Bajaj Allianz, Steadview, Morgan Stanley, and Max Life are some key anchor investors in Firstcry’s IPO. FirstCry will initiate its public offering from August 6 to August 8 with a price band of Rs 440-465 with a minimum bid quantity of 32 shares. Before the anchor investment round, SoftBank was the largest shareholder in FirstCry with a 25.53% stake followed by Mahindra & Mahindra and Premji Invest which hold 10.97% and 10.36% respectively. The company’s founder Supam Maheshwari has 6% of the share capital while the entire ESOP pool forms 8.4% of the cap table. FirstCry demonstrated decent growth during the last fiscal year. Its operating revenue increased by 15% to Rs 6,481 crore while the Pune-based firm managed to control its losses by 34% to Rs 321 crore in FY24 with an improved EBITDA margin. As per the company’s DRHP, it had 1,018 offline stores across the country out of which 632 were franchise-owned while remaining owned by the company until the end of the last calendar year (2023).

FirstCry FY24 revenue crosses Rs 6,500 Cr; GlobalBees contributes 18.6%

EntrackrEntrackr · 11m ago
FirstCry FY24 revenue crosses Rs 6,500 Cr; GlobalBees contributes 18.6%
Medial

Kids-focused omnichannel retailer FirstCry received approval for its initial public offering (IPO) from the Securities Exchange Board of India (SEBI) earlier this month. Ahead of the IPO, the company has disclosed its annual financial report for the fiscal year ending March 2024. The Pune-based firm’s revenue grew 15.1% in the last fiscal year but its losses shrank 34% during the same period (FY24). FirstCry’s revenue from operations increased to Rs 6,481 crore in FY24 from Rs 5,633 crore in FY23, its consolidated financial statements filed with the Registrar of Companies (RoC) show. The sale of its products through its offline stores and website was the primary source of revenue for FirstCry in FY24. Notably, its subsidiary GlobalBees has contributed Rs 1,209 crore income to FirstCry group. FirstCry earned Rs 94 crore from interest on fixed and current investments and other financial assets, tallying its overall revenue to Rs 6,575 crore in FY24. For the omnichannel retailer, the cost of procurement of materials accounted for 60.3% of the overall expenditure which increased 18.8% to Rs 4163 crore in FY24 from Rs 3,504 crore in FY23. Its employee benefits, advertising, transportation, contracts, rent, legal, traveling, and other overheads took FirstCry’s overall cost up by 9.2% to Rs 6,897 crore in FY24 from Rs 6,316 crore in FY23. Check TheKredible for the detailed cost breakup. The decent growth and controlled expenditure helped FirstCry to reduce its losses by 34% to Rs 321 crore during FY24 as compared to Rs 486 crore in FY23. Its ROCE and EBITDA margin improved to -3.47% and 2.51%, respectively. On a unit level, the Supam Maheshwari-led firm spent Rs 1.06 to earn a rupee in FY24. FY23-FY24 FY23 FY24 EBITDA Margin -3.82% 2.51% Expense/₹ of Op Revenue ₹1.12 ₹1.06 ROCE -8.67% -3.47% As per reports, FirstCry will seek a valuation in the range of $2.9-3 billion in its upcoming IPO which may start around Independence day (August 15). Besides FirstCry, another SoftBank-backed company Ola Electric is all set to launch its IPO in early August. Notably, both firms are in losses as of their last reported financial year (FY24). In seeking a valuation that is a three to four times multiple of revenues, FirstCry has tempered down expectations. But what will worry some investors is the fact that it is still making negative margins, even though breakeven seems a matter of a quarter or two. The kids category, while being competitive is also one category where the value add from manufacturer to eventual customer is massive, and for FirstCry to struggle despite largely controlling the distribution channel is surprising, to say the least. It indicates some serious issues with procurement, or a high cost structure ripe for some trimming. Pre-IPO is as good a time as any to identify the key issue.

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