SoftBank, M&M, Premji Invest, TPG to gain big returns from FirstCry IPO
Mahindra & Mahindra tops the list with expected investment returns of 496% in FirstCry IPO, followed by Softbank at 201%.
With its initial public offering (IPO), FirstCry, the omnichannel retailer focused on newborns as well as children, expects shareholders including SoftBank and Mahindra & Mahindra (M&M) to make handsome returns on their investments.
The IPO of Brainbees Limited, the parent company of FirstCry, has fixed the price band in the range of Rs 440-465, valuing the company at $2.9 billion. The company plans to raise Rs 1,666 crore through a fresh issue of shares while it also has an offer-for-sale component for the existing shareholders amounting to 54.3 million shares, according to its red herring prospectus.
The gains made by the key stakeholders in FirstCry take into consideration the higher end of the IPO price band.
Source: Company IPO prospectus
SoftBank, which is the largest stakeholder in the company, will make a gain of 201% return as it plans to sell 20.3 million shares in the IPO. The weighted average cost of SoftBank’s stake in FirstCry stands at Rs 154.40 and holds 25.52% stake.
SoftBank first invested in FirstCry in 2019 and has reduced its holding in the company from 29% previously.
The biggest gainer in the IPO will be Mahindra & Mahindra, which stands to make a 496% return with the sale of 2.8 million shares as the average cost of its share value is Rs 77.96. M&M holds a 10.97% stake in FirstCry.
M&M became a shareholder in FirstCry following the merger of its retail business with the latter.
The other two key stakeholders in FirstCry—Premji Invest (PI) and TPG—will make a gain of 65% and 66%, respectively.
PI, the private equity business by Wipro Founder Azim Premji, holds a 10.34% stake and will be tendering 8.6 million shares bought at Rs 280.87 apiece. Meanwhile, US-based leading private equity investment company TPG, which holds a 4.94% stake, will be tendering 3.8 million shares.
These investors are betting on the growing organised retail market, especially in India, across offline and online channels.
According to FirstCry, its current total addressable market was approximately $48-50 billion in FY24, which is expected to grow at a compound annual growth rate (CAGR) of 11-13% to reach approximately $83-88 billion by FY29.
The company claimed a market share of 16-17% in the organised childcare products market in India as of the fiscal year gone by. It also has a presence in Saudi Arabia and the UAE.
Edited by Kanishk Singh