India's SoftBank-backed FirstCry's parent to raise over 18 billion rupees in IPO

INDIA’S FirstCry parent on Thursday (Dec 28) filed for an initial public offering (IPO) to raise 18.16 billion rupees (S$287.3 million), making it the first pure-play baby products and childcare retailer to go public in the country.

FirstCry parent Brainbees Solutions will sell fresh shares in the IPO and so will other investors, including its biggest shareholder SoftBank, which held a 25.5 per cent share in the company as of Dec 27, draft IPO papers showed.

SoftBank, which will sell 20.3 million shares at the IPO, sold a stake worth six billion rupees in FirstCry this week, according to multiple media reports.

Other investors in FirstCry, including tech-to-tractors firm Mahindra & Mahindra and US private equity fund TPG, will also sell stakes.

The total size of the IPO was not immediately clear.

The childcare products market in India is projected to grow at a compound annual growth rate of 13 to 14 per cent to reach 4.5 trillion to 4.8 trillion rupees in 2027, as parents are increasingly shifting their preferences towards branded goods, according to Redseer Research.

FirstCry, which competes in certain segments with Shoppers Stop, Hopscotch and Flipkart-owned Myntra, saw its losses widen by as much as six times in fiscal 2022 to 2023 due to rising costs.

The company plans to use funds from the IPO to expand its network in India and Saudi Arabia, and to clear leases for existing Indian stores. It has 936 stores in India.

Robust economic growth and hope that Indian Prime Minister Narendra Modi’s ruling party will return to power after general elections in early 2024 has boosted benchmark indices to record highs, fuelling a rise in IPOs in late 2023.

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Morgan Stanley, BofA Securities, and Kotak Mahindra Capital are among the investment bankers for the FirstCry share sale. REUTERS