Japanese conglomerate SoftBank has offloaded shares worth $310 million (around ₹630 crore) in FirstCry, India’s biggest retail player in the mother and childcare segment. The development came on the heels of the news that Mahindra Retail-backed omnichannel retailer is looking to file a draft paper for IPO by this week or early next month. This is going to be the first public offering by a large e-commerce firm after Nykaa got listed in 2021.
SoftBank, which had invested $400 million in FirstCry at a valuation of around $900 million, has reportedly sold shares worth $310 million in the Pune-based baby products retailer in two rounds. The transaction values the unicorn in the range of $3.5-3.75 billion, as per PTI report.
The disinvestment comes at a time when FirstCry is looking to dilute foreign shareholders ahead of its initial public offering (IPO). As per the latest shareholding pattern, funds own the majority of shares in the company, accounting for 76.35%, led by SoftBank, Premji Invest, Chiratae Ventures, and Vertex Ventures. Enterprises hold 13.84% shares in the company, while founders own 6.29% stake. SoftBank is the largest shareholder and holds around 25% stake in the ecommerce company currently.
In the current fiscal, SoftBank Vision Fund, the venture capital arm of the SoftBank Group, has sold stakes in its portfolio of listed Indian companies such as Paytm, Zomato, PB Fintech, the parent of Policybazaar, and Delhivery, among others. The stake sale comes as the SoftBank Group's flagship Vision Fund incurred an investment loss of $3.86 billion (excluding gains on bets in subsidiaries) in the six months ended September 30, 2023, due to lower share prices of its listed portfolio companies and valuation markdowns of its private portfolio companies.
The stake sale by SoftBank in FirstCry has paved the way for family offices and investment firms to pick up shareholding in the firm ahead of the IPO. Recently, Infosys co-founder Kris Gopalakrishnan, TVS group family, Ravi Modi of ethnic wear brand Manyavar, and Family offices of Indian cricketer Sachin Tendulkar invested in the company, as per the report.
Among others, Marico’s Harsh Mariwala’s Sharrp Ventures, Manipal Group’s Ranjan Pai’s MEMG Family Office, and Hemendra Kothari's DSP family office also picked shares in FirstCry.
FirstCry, formally known as BrainBees Solutions, eyes to raise $500 million via the IPO route, which will consist of a primary capital raise (40%) and a secondary share sale (60%) by existing investors.
Founded by Supam Maheshwari and Amitava Saha in 2010, FirstCry reported a revenue of ₹5,632 crore, which was around 2.4 times higher as compared to the preceding fiscal year. However, it net loss ballooned to ₹486 crore, surging over six times from the ₹79 crore reported in FY22.
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