SoftBank-backed e-commerce unicorn FirstCry plans to expand its operations in the Middle East as part of its strategy to replicate its India playbook in global market. The country’s largest multi-channel baby products retailer plans to open 12 new modern stores in the Kingdom of Saudi Arabia (KSA) and new warehouses in Riyadh, Jeddah, and Dammam, KSA, as per the revised DRHP filed with SEBI in April this year.

Brainbees Solutions, the parent of FirstCry, refilled its initial public offering (IPO) documents with the Securities and Exchange Board of India (SEBI) on April 29, 2024, after facing scrutiny. The country’s biggest retailer in the mother and childcare segment had first filed the draft red herring prospectus (DRHP) in December last year, which was returned by the regulator due to insufficient disclosure of key performance indicators (KPIs).

As per the revised DRHP, the IPO size remained unchanged, comprising a fresh issue of equity shares worth up to ₹1,816 crore and an offer for sale (OFS) of up to 54,391,592 shares by existing shareholders. If successful, this will be the first public offering by a large e-commerce firm after Nykaa’s listing in 2021.

Out of a fresh issue size of ₹1,816 crore, FirstCry, which currently operates warehouse facilities and logistics operations in the UAE and KSA, will use ₹155.6 crore to further solidify its position in key markets in the Middle East. The company will use ₹72.6 crore for setting up 12 new modern stores in KSA and ₹83 crore towards setting up new warehouses in Riyadh, Jeddah, and Dammam, KSA, admeasuring an aggregate of around 0.25 million square feet, the DRHP highlighted.

The company expanded overseas by commencing operations in UAE and KSA in 2019 and 2022, respectively. It operates as an online platform, offering products in various categories, including apparel, footwear, baby gear, nursery, diapers, toys and personal care, amongst others, with more than 262,000 stock-keeping units (SKUs) from over 3,600 brands, including global brands, home brands and third-party Indian brands. It also operates its warehousing facilities and logistics operations in the UAE and KSA.

To open 256 new stores in India

For India business, the Pune-based company plans to use ₹126.5 crore for setting up 256 new modern stores under the ‘BabyHug’ brand and ₹14.2 crore towards developing warehouse in India, measuring around 0.13 million square feet by fiscal 2027. Another ₹116.5 crore will be used to meet expenditure for lease payments for its existing identified modern stores owned and operated by the company in India.

Brainbees Solutions currently operates two formats of modern stores - BabyHug and FirstCry. BabyHug modern stores exclusively sell BabyHug products while FirstCry modern stores sell multiple brands, including third-party brands. As of December 31, 2023, it had a network of 1,018 modern stores in 508 cities across India, including 265 BabyHug stores and 632 asset-light franchisee model modern stores.

The company proposes to use ₹388.2 crore for investment in its Indian subsidiary, Digital Age, which was acquired on May 2, 2022. The fund will be utilised for setting up new modern stores under the FirstCry brand and other home brands as well as lease payments for its existing identified modern stores owned and controlled by Digital Age.

Meanwhile, ₹173.59 crore will be invested in its subsidiary, Globalbees Brands, for the acquisition of additional stake in the step-down subsidiaries. The company will invest another ₹150 crore on sales and marketing initiatives; ₹57.6 crore in technology and data science costs; and the remaining fund will be used for funding inorganic growth through acquisition and other strategic initiatives and general corporate purposes.

Established in 2010 by Supam Maheshwari and Amitava Saha, FirstCry platform was launched to create a one-stop destination for parenting needs. Over the financial years 2021 to 2023, FirstCry's consolidated revenue from operations has grown from ₹1,602.85 crore in FY21 to ₹2,401 crore in FY22, and further to ₹5,632.54 crore in FY23. The revenue growth was driven by both organic growth and inorganic growth (in particular, the acquisition of Digital Age in May 2022).

However, the losses of the company ballooned more than 6 times to ₹486 crore in FY23 as compared to ₹79 crore in FY22, dented by higher expenses. The total expenses surged 146% to ₹6,316 crore in FY23 from ₹2,568 crore in the last fiscal. The cost of procurement of materials, which accounted for 62% of the overall cost, rose 2.5 times YoY to ₹3,935 crore, while employee benefits and advertising spent grew by 127% and 55%, respectively in FY23.

(DISCLAIMER: The views and opinions expressed by investment experts on are either their own or of their organisations, but not necessarily that of and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.