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Brainbees Solutions, the parent behind mothercare and baby products company FirstCry saw its initial public offering subscribed 12.2 times on day 3, mainly pulled by bid from qualified institutional investors, according to data from BSE. 

FirstCry’s market position as a hyper focused retail platform is working in its favor for driving Qualified Institutional Buyer (QIB) bids. QIBs, which typically invest on the last day to gauge overall market demand, sailed through for the Supam Maheshwari-led company. This segment was subscribed a mere 3% by the end of the second day.

The retail portion of the IPO was booked 2.31 times on the third day after being oversubscribed on day 2. This segment was subscribed 46% on day one. Meanwhile, the portion reserved for employees was subscribed 6.57 times by the end of third day after seeing good traction since the beginning. 

Brokerages continue to remain bullish on the company citing solid anchor subscriptions, global expansion, a retail focus and the development of private label brands. 

“Its cash flows per unit of capital employed has increased over a period of time in FY24. Similarly, it is making 1.5x of revenue per unit of capital deployed in FY24. It is attractively priced vs peers. The profitability can get a boost with more focus on cost efficiencies which typically listed companies are compelled to do to drive profitability as well as improved product mix.” said Unnati Bhavekar (Jadhav), Lead Research Analyst at KR Choksey. 

Brainbees plans to list on domestic bourses on August 11. Companies move for public debuts to bring in listing gains; the profit made by investors when the stock gets listed at a higher price than the IPO issue price.

Bhavekar says based on the Grey Market Listing premium, FirstCry “can bring in 2%-18% kind of listing gains, given the sentiments are weak with the geopolitical concerns as well as increased interest rates in Japan and increased concerns around US recession.” Grey market premium or GMP is a premium amount paid at which initial public offering (IPO) shares are traded before it is listed on the stock exchanges.

Overall, the IPO received a dull response on its initial two days of subscription, attracting only 11% and 30%, respectively, affected by global market volatility. 

The omnichannel retailer had set its IPO price band between Rs 440 and Rs 465 per equity share for its nearly $3 billion initial public offering (IPO). However, it does not have any promoters backing it and its CEO and Co-Founder Supam Maheshwari is not expected to dilute any stake in the IPO. 

For FY24, the company posted revenue of Rs 6,480.9 crore and an adjusted EBITDA margin of 4.2%, though it faced a loss of approximately Rs 321 crore.