In the bustling world of stock market investments, all eyes are on the imminent initial public offering (IPO) of FirstCry, the renowned mother and child care e-commerce platform. With a valuation of USD 3 billion and SoftBank as a key investor, the upcoming IPO, scheduled for early 2024, has become a hot topic of discussion among investors, high profile people and market enthusiasts. Let's see why?
SoftBank Takes Strategic Move Ahead of FirstCry IPO
In a strategic move, SoftBank Vision Fund has decided to divest a significant portion of its shares in FirstCry ahead of the IPO launch. The move is aimed at paving the way for other major investors and family offices to secure their positions in the childcare e-commerce startup.
High-Profile Investors Join FirstCry Frenzy
Adding to the excitement, several high-profile investors have already jumped on the FirstCry bandwagon. The family offices of legendary Indian cricketer Sachin Tendulkar, Ravi Modi of the popular ethnic wear brand Manyavar, Infosys co-founder Kris Gopalakrishnan, and the esteemed TVS Group have reportedly acquired equity shares of the company.
SoftBank's recent transaction has brought its ownership in FirstCry to below 25 percent, with shares valued at Rs 600 crore being divested prior to the public offering. This move marks a shift from SoftBank's previous holding of approximately 30 percent in the company.
Growing List of Investors in FirstCry
This development follows earlier investments by family offices belonging to prominent figures such as Ranjan Pai (Manipal Group), Harsh Mariwala (Marico) through Sharrp Ventures, and Hemendra Kothari's DSP family offices. These investments were reported in August, indicating a growing interest in FirstCry among diverse investors.
FirstCry IPO Details and Valuation Expectations
FirstCry is gearing up for its IPO launch, tentatively planned after the Lok Sabha elections, which are anticipated to catalyze a surge in the Indian stock market. While the company's previous valuation stood at USD 3 billion, there are indications that the IPO valuation might reach USD 4 billion.
The IPO aims to generate USD 500 million, with 37 percent of the stake allocated for a fresh issue and the remainder through Offer For Sale (OFS). Notably, SoftBank's initial injection of USD 400 million into FirstCry in 2020 positioned the company for substantial growth.
New Investors Expected in FirstCry's Cap Table
As the IPO date approaches, FirstCry is set to welcome new investors, including Premji Invest—the family office of Wipro founder Azim Premji, and the Mahindra group.
The draft red herring prospectus (DRHP) is likely to be filed with the market’s regulator Sebi before December 29, offering a comprehensive overview of FirstCry's financials and growth prospects.
FirstCry's Unique Position in the Market
Headquartered in Pune, FirstCry is poised to become the second Indian vertical e-commerce platform to undergo an IPO, following Nykaa's successful IPO in 2021. Specializing in a diverse range of products for children and mothers, FirstCry operates through both online and offline channels.
In anticipation of its IPO, FirstCry attracted investments totaling approximately Rs 435 crore in August from three prominent family investment offices within India Inc. Notably, these investments involved the acquisition of stakes from FirstCry's largest investor, SoftBank.
Navigating FDI Laws and SoftBank's Strategic Reduction
Adhering to India's FDI laws for e-commerce, FirstCry is mandated to maintain its foreign shareholding below 51 percent. In this context, SoftBank is actively working to reduce its stake to below 26 percent to avoid being classified as a promoter of the company.
The buzz around the FirstCry IPO continues to grow, with investors eagerly awaiting the filing of IPO papers later this month. As the childcare e-commerce platform prepares to make its mark on Dalal Street, the market is abuzz with anticipation and speculation.
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