Ratan Tata Plans To Sell Shares In FirstCry IPO; Kids Product Platform Files Draft For Public Listing

India's largest multi-channel retailing platform for Mothers', Babies' and Kids' products, Brainbees Solutions popularly known as FirstCry.com has filed its draft prospectus with Sebi for launching their initial public offering (IPO). The public offer is a mixture of fresh issues and offers for sale. As per the draft, billionaire and philanthropist Ratan Tata will be offloading a portion of his stake in the FirstCry IPO.

As per the draft, Tata Group's chief Ratan Tata who turned 86 on December 28th, will be selling 77,900 equity shares at an average cost of Rs 84.72 apiece. His shareholding initially stood to the tune of 66 lakh shares or 0.02% stake in FirstCry.

Overall, the IPO comprised a fresh issue worth Rs 1,816 crore, and an offer for sale (OFS) of up to 54,391,592 Equity Shares by selling shareholders.

Apart from Ratan Tata, major selling shareholders of the IPO are ---- 20,318,050 Equity Shares by SVF Frog (Cayman), up to 2,806,174 Equity Shares by Mahindra & Mahindra, up to 8,601,292 Equity Shares by PI Opportunities Fund- 1, up to 3,899,525 Equity Shares by TPG Growth V SF Markets, up to 3,014,233 Equity Shares by NewQuest Asia Investments III, up to 2,523,280 Equity Shares by Apricot Investments, up to 2,404,344 by Valiant Mauritius Partners FDI, up to 837,676 Equity Shares by TIMF Holdings (Mauritius), by Think India Opportunities Master Fund LP (Cayman) and up to 616,945 Equity Shares by Schroders Capital Private Equity Asia Mauritius II.

The proceeds from the fresh issue will be used for funding the expenditure for setting up new modern stores, a warehouse and lease payments for its existing identified modern stores in India.

Also, a portion of the proceeds will be utilized towards funding the investment in its subsidiary, FirstCry Trading for overseas expansion by setting up new modern stores and warehouses in the Kingdom of Saudi Arabia ("KSA"); towards funding the investment in its subsidiary, GlobalBees Brands; towards acquisition of additional stake in its indirect subsidiaries; towards sales and marketing initiatives, technology and data science cost including cloud and server hosting related costs; towards funding of inorganic growth through acquisition and other strategic initiatives as well as for general corporate purposes.

Launched in 2010 in India, the FirstCry platform had a goal to create a one-stop destination for parenting needs across commerce, content, community engagement, and education, based on brand affinity, loyalty and trust of customers.

FirstCry is the pioneer of multi-channel retailing for Mothers', Babies' and Kids' products in India. The multi-channel retailing platform includes FirstCry's online platform accessible through the mobile application and website, FirstCry modern stores comprising franchisee-owned, franchisee-operated modern stores ("FOFO"), company-owned and company-operated modern stores ("COCO") as well as general trade retail distribution.

Currently, the company offers products in various categories, including apparel, footwear, baby gear, nursery, diapers, toys and personal care, amongst others.

As of June 2023, the company offers over 1 million SKUs from over 6,800 brands, including prominent third-party Indian brands, global brands, and their home brands. As of June 30, 2023, the FirstCry mobile application has been downloaded more than 104 million times in India. Further, they have a network of 936 FirstCry and BabyHug modern stores in 465 cities in 27 states and four union territories across India with over 1.76 million square feet of retail space, as of June 30, 2023.

Among key competitive strengths of FirstCry would be its largest multi-channel, multi-brand retailing platform for Mothers', Babies' and Kids' products; powerful network effects driven by content, brands and data; brand affinity, loyalty and trust of customers in the FirstCry brand; combination of curating growing home brands and relationships with prominent third-party brands; technology and data-driven, personalized customer journey has led to higher customer engagement; full-stack platform with control over manufacturing and supply chain; and proven and scalable business model.

From financial year 2021 to 2023-end, FirstCry's business has recorded healthy revenue growth. For FY21, FY22, FY23 and the three months ended June 30, 2023, the company's revenue from operations was Rs 16,028.54 million, Rs 24,012.88 million, Rs 56,325.39 million, and Rs 14,069.33 million, respectively, by the Restated Consolidated Financial Statements. This increase in revenue from operations is a result of both organic and inorganic growth.

Companies like Kotak Mahindra Capital Company, Morgan Stanley India Company, BofA Securities India, JM Financial and Avendus Capital are the Book Running Lead Managers to the issue.

Post the IPO, the company's proposed equity shares are expected to be listed on stock exchanges BSE and NSE respectively.