Brainbees Solutions Limited’s initial public offering (IPO), which operates under the FirstCry brand, became available for subscription on Tuesday, August 6, and will remain open until August 8. The offering price ranges from ₹440 to ₹465 per equity share, having a face value of ₹2 apiece.
Retail investors can place bids on up to 13 lots, each containing 32 shares. At the highest pricing point, ₹465 a share, the minimum investment is ₹14,880 per lot. This IPO is the second largest in 2024 in terms of size.
According to stock market watchers, the Grey Market Premium (GMP) for FirstCry IPO is ₹45 per share. Brainbees Solutions’ equity shares are trading for ₹510 in the grey market, up 11.8% from the issue price of ₹465 per share.
The subscription status on the second day
So far, 17% of the IPO’s subscription has been received. According to NSE data available until noon on Wednesday, the second day of the bidding process, the public issue got bids for 86.42 lakh equity shares, compared to 4.96 crore shares on offer.
The retail IPO was subscribed to 74%, while the share earmarked for staff was subscribed to 2.72 times. So far, 13% of the Non-Institutional Investors (NII) category has been subscribed, while Qualified Institutional Buyers (QIBs) have yet to bid.
Information about Brainbees Solutions
The company is the world’s largest multi-channel retail platform for mother, baby, and child products, with a rising presence in select foreign markets. The company established the FirstCry platform, which includes commerce, information, community interaction, and education for all your parenting requirements.
It sells a wide variety of things, including clothing, footwear, baby gear, nursery accessories, diapers, toys, and personal care, from Indian third-party brands, global brands, and its brands.
The company offers over 1.6 million SKUs from more than 7,500 prominent Indian and global brands. According to the firm’s DRHP report, the corporation intends to build multi-year connections with moms, beginning with the baby’s conception and lasting until the youngster is roughly 12 years old.
Details on the issue
The company plans to raise ₹4,194 crore through this offering, including a ₹2,528 crore offer for sale and a ₹1,666 crore fresh issue. The funding will be used for a variety of essential purposes. This involves the opening of new modern stores under the “BabyHug” brand and the development of a warehouse in India.
The proceeds will also be utilized to finance lease obligations for the company’s current modern outlets in India. Additionally, investments will be made in its subsidiary, Digital Age, to establish new modern stores under FirstCry and other house brands, as well as to cover lease payments for existing stores managed by Digital Age in India.
Furthermore, the business intends to invest in its subsidiary, FirstCry Trading, to support global expansion by creating new sophisticated stores and warehouses in Saudi Arabia. Globalbees Brands’ investment will be focused on acquiring a larger stake in its subsidiary.
The budget also includes funds for sales and marketing initiatives, technology and data science costs, such as cloud and server hosting, and financing inorganic development through acquisitions and other strategic initiatives, in addition to general business reasons.
Should you apply for the initial public offering?
Because of the company’s excellent brand positioning, the majority of domestic brokerage firms have advocated investing in the IPO. SBI Securities emphasized that the company is well-positioned to serve the $120 billion market for infant and mother-and-child care products, citing its pioneering role in multi-channel retailing in India. It rates the issue as ‘Subscribe’ for long-term advantages.
Nirmal Bang noted that FirstCry’s shares are priced at 3.8x EV/sales for FY24, which is lower than Nykaa’s 8.4x. It emphasized FirstCry’s prominence in the infant products market and advised subscribers to subscribe for long-term benefits.
AUM Capital likewise endorses a ‘Subscribe’ recommendation, citing more discretionary money, which encourages parents to spend more on their children’s well-being. It believes that FirstCry’s distinct brand positioning and market share make it a top choice for prospective clients.
According to the brokerage, India’s low childcare penetration represents a huge opportunity for branded players such as FirstCry, and more investments in production are projected to boost its local and international reach.
Canara Bank Securities described the IPO as a good investment opportunity, citing the company’s large Total Addressable Market (TAM) and strong operational foundation. It also points out that FirstCry’s 84% share of the unorganized market and 16% share of the organized sector position it well to win a larger part of the organized market.
The brokerage stated that the company’s long-term customer base, which spans 15-16 years, assures a consistent flow of business, consolidating its position in the childcare sector. As a result, the brokerage company offers a ‘Subscribe’ rating for the IPO for long-term returns.
