Everything you need to known about Brainbees Solutions (Firstcry) IPO

About the company

Founded in 2010, Brainbees Solutions Limited, popularly known as “FirstCry” is a multi-channel retailing platform offering products for mothers, babies, and Kids via its online platform ‘FirstCry’. The company’s integrated FirstCry platform helps fulfil three essential parenting needs i.e., shopping, parenting community, and education. The company offers products to parents right from the baby’s conception (i.e., nine months before birth) and can continue until the child reaches about 12 years of age including apparel with growing clothing sizes, diapers, toys, and personal care, amongst others. content-led strategy enables engagement with parents early in their parenting lifecycle through its YouTube channel, i.e. FirstCry.com parenting platform. The company sells its product through various channels: online platforms, modern stores, and general trade retail distribution channels in India. Internationally, The company has expanded in select markets, establishing a presence in UAE and KSA in 2019 and 2022 respectively aiming to replicate the India playbook.



Issue size

Funds Raised in the IPO Amount
Overall ₹4193.73 crores
Fresh Issue ₹1666 crores
Offer for sale ₹2527.73 crores

Utilisation of proceeds

Purpose INR crores (%)
Capital expenditure 108.1 (6.49%)
Lease payments 93.1 (5.59%)
Investment in Subsidiary, Digital Age 299.6 (17.98%)
Investment in Subsidiary, First Cry 155.6 (9.34%)
Investment in Subsidiary, Globalbees Brands 169 (10.14%)
Sales and marketing initiatives 200 (12%)
Technology and data science costs 57.6 (3.45%)
Funding inorganic growth & General corporate purposes 583.1 (35%)

Financials

Financial year ended March 2022 March 2023 March 2024
Total assets 6,197.16 7,119.83 7,510.38
Revenue 2,516.92 5,731.28 6,575.08
Profit After Tax (78.69) (486.06) (321.51)
EPS (1.74) (9.97) (6.20)

*All figures except EPS are in ₹ Crores

Strengths

  • India’s largest multi-channel, multi-brand retailing platform: The company is India’s largest multi-channel retailing platform for Mothers’, Babies’ and Kids’ products, in terms of GMV driven by its scale in multi-channel retailing in India, along with a large parenting community on its platform.

  • Combination of curating growing home brands and relationships with third-party brands: The company offers customers a variety of products, ranging from products of global and domestic Mothers’, Babies’, and Kids’ brands (such as Medela India Private Limited, Chicco, Mee-Mee and Funskool (India) Limited), “mompreneurs” (i.e., mothers who operate home-based businesses) and own home brands by having a dedicated brand partnerships team that works with brands to build mutually beneficial marketing campaigns.

  • Centralized inventory management: Through centralized inventory management covering both the online platform and modern stores, the company can drive auto replenishment algorithms for its modern stores which coupled with the warehouse and logistics network helps modern stores remain capital efficient (i.e., inventory-lean).

  • Full-stack platform with control over manufacturing and supply chain: The company has leveraged a network of over 900 contract manufacturers across India and overseas for home brands in FY24. This enables the company to address product and pricing gaps in the market comprehensively and also exercise greater control over product quality, as well as improve the gross margins.

Risks

  • Dependence on E-commerce: The company draws approximately 77% of its revenue from online sales. Future expansion relies heavily on the company’s capability to efficiently adapt to changing consumer behaviour in digital platforms. Should there be insufficient development and growth within the online commerce industry in India, or if the company fails to respond effectively to consumer behaviour changes, the operational outcomes could suffer negative consequences.

  • Negative cash flows from operating activities: The company has had negative cash flows from its operating activities in the last 3 years. Negative cash flows over extended periods could affect the company’s ability to implement its growth plans.

  • Past losses: The company has incurred losses in the last 3 years and may continue to do so in the future, which may adversely impact the business and the value of the Equity Shares.


Schedule

Issue period 06 Aug 2024 - 08 Aug 2024
Price band ₹440 – ₹465
Minimum bid quantity 32 & Multiples thereof
UPI mandate deadline 08 Aug 2024 (5 PM)
Allotment finalization 09 Aug 2024
Refund initiation 12 Aug 2024
Share credit 12 Aug 2024
Listing date 13 Aug 2024
Mandate end date 23 Aug 2024
Lock-in end date for anchor investors (50%) 08 Sep 2024
Lock-in end date for anchor investors (remaining) 08 Nov 2024

Note: The schedule is tentative. The anchor lock-in period ends 30 days after the actual allotment date for 50% of the shares and 90 days after for the remaining portion. The allotment status can be checked on the registrar’s website and the exchange website.

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