In the upcoming initial public offering (IPO) of e-commerce platform FirstCry, business tycoon Ratan Tata plans to sell all his 77,900 shares. Back in 2016, Tata acquired a 0.02 per cent stake for ₹66 lakh in Brainbees Solution, the company behind the omnichannel kidswear brand FirstCry.
As per the draft red herring prospectus (DRHP) submitted by Brainbees Solutions, the parent company of FirstCry, to the Securities and Exchange Board of India (SEBI), the initial public offering (IPO) includes the issuance of fresh equity shares valued at ₹1,816 crore. Additionally, existing shareholders and promoters will participate in an offer for sale.
Current stakeholders, such as Mahindra & Mahindra (M&M), TPG, NewQuest Asia, and SoftBank, intend to collectively divest 5.44 crore shares in Brainbees through an Offer for Sale (OFS) in conjunction with the primary issue.
SoftBank, the major shareholder with a 25.5 percent stake in FirstCry, holds the largest ownership in the online e-commerce unicorn. The document reveals that Mahindra plans to sell its 0.58 percent stake in the parent company, while SoftBank aims to offload 2.03 crore shares.
The DRHP discloses that FirstCry might explore a private placement of shares to specific investors, with a potential value of up to ₹363.20 crore. FirstCry operates both online and physical stores, offering toys, apparel, and accessories for babies, kids, and mothers.
While the DRHP doesn’t specify the IPO subscription dates, various media reports suggest that the public issue is anticipated to commence in early 2024. The offer price and IPO price band have not been disclosed at this stage.
According to the DRHP, the net proceeds from the IPO will be allocated for establishing new retail outlets, developing warehouses, and supporting international expansion. Kotak, Morgan Stanley, Bofa Securities, JM Financial, and Avendus serve as the book-running lead managers, and Link Intime India Private Limited acts as the offer’s registrar.
