SoftBank, others may cut FirstCry shares rises firm cost to $4 billion  

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Etailer holds addresses with Kedaara Cap, and the Secondary Round before the IPO is anticipated to bring the original PEs on board.  

Highlights –  

  • Investors seeking to sell FirstCry shares include Japanese firms SoftBank and NewQuest Capital Partners. 

  • Following the proposed investment in the last secondary round, Premji Invest raised its interest in FirstCry. 

  • FirstCry experienced a net profit of 216 crore rupees in FY21 as opposed to a deficit of 191 crore rupees the year before. 

Japan’s SoftBank and NewQuest Capital partners are among the investors looking to sell shares in FirstCry, which is scheduled to go public soon. These investors value the baby goods store at between $3.5 billion and $4 billion. 

Another individual concerned about the situation indicated that Masayoshi Son-led SoftBank, the largest shareholder in the omnichannel firm with 29 percent, intends to drop its ownership to less than 25. 

The discussions are taking place as the firm, which is based in Pune, prepares to file its initial public offering (IPO) papers in the next few months.  

At the same time, the company is aiming to reduce its foreign influence while gaining local private equity support. 

On the condition of anonymity, many sources stated that FirstCry had spoken with the Mumbai-based private equity firm Kedaara Capital about participating in the alternative round. 

A source with knowledge of the situation stated that the business “plans to file its draught red herring prospectus (DRHP) veritably soon”. 

“This is comparable to a pre-IPO sale which will establish the price for the firm and immaculately they want to bring on board local money,” one of the people told ET. 

The individual used Premji Invest, the family investment company run by Wipro NSE-1.94 author President Azim Premji, as an example.  

Premji Invest upped its investment in FirstCry 

Premji Invest increased its stake in FirstCry, backed by Softbank during the previous secondary round after the proposed investment from the National Investment and Structure Fund was unable to materialize. 

Currently valued at about $2.7 billion, FirstCry is a platform for point-of-sale transactions. This value was assigned to it before this period when Premji’s investment was made.  

Premji Invest, Mahindra Retail, and US private equity giant TPG all control between 9 and 11 percent of the business, according to a source with knowledge of the situation. 

Given that it is a rare example of a profitable e-commerce firm and has reported net profitability in the fiscal year 2021, those familiar with the company’s IPO strategy stated the company is hoping to go public for $6–$7 billion. 

“Several groups of investors are vying for a piece of the pre-IPO secondary round. The firm is still interested in going public, and the subject will be discussed at the upcoming board meeting “added a second source who was aware of the talks. 

If the business files for an IPO, it will be the first new-age tech startup to do so following logistics player Delhivery’s public listing in May amid a generally cautious request. 

Rarely profitable E-commerce Business 

FirstCry generated a net profit of 216 crore rupees in FY21 as opposed to a loss of 191 crore rupees in the previous fiscal year.  

It declared earnings of Rs. 603 crores over the same period as opposed to Rs. 814 crores previously.  

In the competitive world of e-commerce, where vertical merchants like Amazon and Flipkart still struggle to carve out distinguishable borders, this was an exceptional achievement.  

The Registrar of Companies still doesn’t have the FY22 checked financials available (RoC). 

The first successful e-commerce company in India, Nykaa, a retailer of beauty products, was listed on the bourses last time. 

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