Brainbees Solutions, the parent company of omnichannel maternity and babycare platform FirstCry, continued to attract tepid response for its initial public offering on day 2 as the overall issue got subscribed just 30%.
However, the retail portion of the IPO—which was subscribed 46% on day one—was fully subscribed by the end of the second day.
The non-institutional investors portion saw an underwhelming response with only 30% subscribed.
A mere 3% of the portion reserved for institutional buyers was subscribed, while the portion reserved for employees was subscribed 3.44 times. Institutional investors typically invest on the last day to gauge the overall market demand and for liquidity management.
However, even with tepid investor interest, brokerages are still betting on FirstCry’s increased spending on children’s products, growth in international markets, an expanding retail presence, and the development of home brands.
FirstCry has set its IPO price band between Rs 440 and Rs 465 per equity share for its nearly $3-billion initial public offering (IPO). The company aims to list on domestic stock exchanges by August 11.
SoftBank will reduce its stake from 25% to about 20%, while Mahindra & Mahindra will participate in the offer-for-sale (OFS) component by selling 10% of its total shareholding. Notably, FirstCry does not have any promoters backing it, and its selling shareholders, with the exception of Schroders, will dilute approximately 11% of their total share capital through the OFS.
For FY24, the company reported revenue of Rs 6,480.9 crore and an adjusted EBITDA margin of 4.2%. However, it incurred a loss of around Rs 321 crore. During the same period, FirstCry had 91.1 lakh annual unique transacting customers and saw its gross merchandise value for India grow by 25.6% to Rs 9,121.1 crore in FY24.
