Brainbees Solutions, Parent Company of FirstCry, Submits IPO Application

Brainbees Solutions, headquartered in Pune and the parent company of the popular e-commerce platform FirstCry, officially filed its application for an initial public offering (IPO) with the Securities and Exchange Board of India on December 28, 2023.

IPO Details and Objectives

The FirstCry IPO is set to raise ₹1,816 crore, consisting of a primary issue of shares. The IPO size details are yet to be disclosed, but it includes a fresh issue of shares amounting to ₹1,816 crore.  OFS segment involves the sale of up to 54.4M shares by existing investors, including  Mahindra & Mahindra, SoftBank, and US private equity fund TPG.

The net proceeds from the FirstCry IPO will be allocated for various purposes, including establishing new modern stores, enhancing warehouse infrastructure, lease payments for existing stores, investing in sales and marketing efforts, technology and data science advancements, as well as funding inorganic growth through acquisitions and strategic initiatives. A portion of the funds is earmarked for overseas expansion, particularly in Saudi Arabia.

Lead Managers and Participants

The book-running lead managers for the IPO include renowned names such as Kotak Investment Banking, Morgan Stanley, BofA Securities, JM Financial, and Avendus.

Mahindra & Mahindra intends to engage in the Offer for Sale (OFS) by selling a maximum of 28.06 lakh equity shares of Brainbees, representing 0.58% of the company’s current issued and paid-up equity share capital. The sale price for these shares will be decided upon the announcement of the IPO's price band. The specific number of shares sold in the OFS will be concluded at the conclusion of the Book Building Process.

SoftBank-operated SVG Frog intends to sell 2.03 crore shares in the FirstCry IPO. SoftBank currently holds the largest stake in FirstCry at 25.5%, followed by M&M’s 10.98% stake. Earlier reports indicated that SoftBank had sold shares worth USD 310 million to the omnichannel retailer.

Additional shareholders participating in the IPO comprise PI Opportunities Fund, TPG, NewQuest Asia, Apricot Investments, Valiant Mauritius Partners, TIMF Holdings, Think India Opportunities Master Fund, and Schroders Capital Private Equity Asia.

Financial Performance and Highlights

Brainbees Solutions recently unveiled its financial results for the fiscal year 2023, revealing a pre-tax loss of ₹585 crore. The Employee Stock Ownership Plan (ESOP) costs totaled ₹361 crore, and finance costs were recorded at ₹72 crore. Despite these figures, the company emphasized that its core business continues to show robust growth, with an overall business growth rate of 135%.

Final words

Brainbees Solutions' decision to go public is a notable step in the Indian e-commerce scene. The company plans to use the funds from the IPO to expand and strengthen its presence in both local and global markets.