FirstCry IPO: Everything you need to know ahead of the IPO

In the world of e-commerce, FirstCry, a Pune-based unicorn, is gearing up for a public market debut in the coming year. With a stellar surge in revenue and ambitious plans, the SoftBank-backed startup is set to make waves. However, the path to IPO is not without its twists, as widening losses and strategic manoeuvres come into play. 

FY23 Highlights 

In the financial year 2022-23, FirstCry witnessed an impressive 135% jump in its revenue, soaring from Rs 2,401 crore to a staggering Rs 5,633 crore. This meteoric rise can be attributed to the surging demand for the diverse array of products the company offers, ranging from baby clothes and diapers to cycles and toys. 

Bottom Line Blues 

While the top line showcased remarkable growth, the bottom line painted a different picture. FirstCry’s net loss witnessed a substantial widening, escalating by 515% from Rs 79 crore in FY22 to Rs 486 crore in FY23. The primary culprit behind this drastic shift was a surge in overall expenses. 

Expense Surge 

Total expenses for FirstCry escalated from Rs 2,568 crore in FY22 to Rs 6,316 crore in FY23, marking a formidable 146% YoY change. This surge was propelled by various factors, including amplified employee-related costs, finance expenses, and other procurement-related expenditures. 

Balancing Act and Future Outlook 

In response to the raised eyebrows over widening losses, FirstCry issued a statement emphasizing the core business’s robust growth, boasting a positive bottom line and profitability. The overall business expansion clocked in at an impressive 135%. This signals a balancing act amid soaring demand and the need for prudent financial management. 

SoftBank’s Strategic Move 

In a strategic move ahead of the impending IPO, SoftBank, a significant stakeholder in FirstCry, has decided to divest a substantial portion of its shares. This decision not only opens avenues for other major investors and family offices but also aligns with regulatory requirements to keep foreign shareholding below 51%. 

New Faces in the Investor Landscape 

As SoftBank relinquishes its grip, notable personalities like legendary cricketer Sachin Tendulkar, Manyavar’s Ravi Modi, Infosys co-founder Kris Gopalakrishnan, and the TVS group have stepped in. These high-profile investors underscore the market’s confidence in FirstCry’s potential. 

IPO Prospects and New Investors 

FirstCry is gearing up to file its draft IPO papers, eyeing a valuation between $3.5-3.75 billion—slightly higher than its last fundraising valuation of $3 billion. Notable additions to the investor roster include Premji Invest, the family office of Wipro founder Azim Premji, and the Mahindra Group. 

Conclusion 

As FirstCry navigates the path to public listing, the contrasting narratives of surging revenue and widening losses underscore the challenges of scaling in the competitive e-commerce landscape. With strategic shifts in ownership and a diverse investor base, FirstCry is poised for an exciting chapter, inviting market watchers to stay tuned for further developments. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.