Pune-based omnichannel marketplace FirstCry has refiled its draft red herring prospectus (DRHP) after markets regulator Securities and Exchange Board of India (SEBI) claimed that the Supam Maheshwari-led startup failed to disclose certain key indicators in its draft papers filed last December.
As per the recent DRHP paper, the IPO offer continues to remain the same. The SoftBank-backed startup will be raising INR 1,816 Cr through fresh issue of shares, while the offer-for-sale (OFS) component comprises shareholders selling 5.4 Cr equity shares.
Shareholders, including SoftBank, Premji Invest, TPG Growth and Mahindra among others, will participate in the OFS.
The startup in consultation with the Book Running Lead Manager (BRLMs) is also likely to raise a Pre-IPO placement worth INR 363 Cr from certain investors. If the Pre-IPO Placement is completed, the amount raised pursuant to the Pre-IPO Placement will be reduced from the fresh issue.
The startup in DRHP disclosed that it would utilise the fresh issue for:
- Investment in its subsidiary – Digital India for setting up new modern stores under the FirstCry brand name, and other home brands of the company, and lease payments for existing FirstCry stores – INR 388.2 Cr.
- Investment in its own subsidiary – GlobalBees Brands for the acquisition of additional stake in our step-down Subsidiaries – INR 173.5 Cr.
- For setting up of new modern stores under the brand name “BabyHug” and opening of new warehouses – INR 140.7 Cr.
- For sales and marketing initiative – INR 150 Cr.
- Expenditure for lease payments for our existing identified modern stores owned and operated by our Company, in India – INR 116.5 Cr
- Technology and data science cost including cloud and server hosting related costs – INR 57.6 Cr.
For the first nine months in FY24, the startup reported sales of INR 4,814 Cr, while incurring a loss of INR 278.2 Cr. The startup’s biggest expense continues to be its procurement cost, which stood at INR 3,108.1 Cr, which is 60% of the startup expenses – INR 5,159.7 Cr in the first three quarters of FY24.