FirstCry’s top executives and investors are likely to benefit greatly from the IPO

Bengaluru: Top executives and investors in FirstCry, whose shares will be listed on the stock exchange on August 13, are expected to see big gains in their company’s upcoming initial public offering (IPO), according to an analysis of the draft prospectus (DRHP). Mint showed.

The price range of Brainbees Solutions Ltd, which operates multi-channel businesses selling children’s clothing under the FirstCry brand, has been set at ₹440 to ₹465 per capital share of nominal value ₹2. The company intends to raise $2.9 billion, and the public offering includes a new issue ₹1,666 crore and offer for sale (OFS) of up to 54 million shares.

FirstCry’s top executives own stock worth ₹2,227 crore, of which the founding team alone, comprising Supam Maheshwari (CEO), Amitava Saha (Former COO), Sanket Hattimtatur (Chief Staff) and Prashant Jadhav (Technical Director), is worth Rs. ₹2,127 crore. The values ​​are calculated based on the lower end of the price range.

The remaining directors have received stock options over the years under the company’s Employee Stock Options Program (ESOP) policy. FirstCry has a vesting period of 4 years with a vesting period of 10 years.

Senior staff like Ajoy Kumar Kar (VP Operations) will be ₹4.5 crore, Amitabh Sadasiv (Store Operations Manager) ₹1.32 crore, Anirudh Chaturvedi (CPO) ₹14.93 crore. Arpit Agarwal (VP Merchandising), Megha Arora (VP Private Labels & Imports) and Shwetank Gupta (VP Retail) have a combined inventory of Rs. ₹8.89 crores.

Several investors, including Mahindra & Mahindra Ltd, Schroders Capital, NewQuest and SVF Frog (Cayman) Ltd, are expected to make windfall gains from the IPO. The average cost to Mahindra to acquire FirstCry shares was ₹77.96 and Schroders ₹145.26. The average cost of acquiring NewQuest and SVF was ₹133.69 and ₹Respectively 154.40 per piece.

“Seeing FirstCry and other new-age startups filing for IPOs has given the startup ecosystem renewed hope after a few rather dismal years for startups in the public markets,” said Natasha Treasurywala, partner at Desai & Diwanji, adding that investors find IPOs of sustainable business models with a slow but steady growth trajectory much more attractive than instant profitability.

Other investors including Premji Invest, private equity firm Chrys Capital’s Apricot Investments and Sage Investment Trust, whose average acquisition cost is ₹280.87 per share is also expected to generate strong gains. Infosys co-founder Kris Gopalakrishnan’s family office Pratithi Investment Trust (Avg. acquisition cost: ₹312.48) and family office of Satyadharma Investments (Non-Executive Vice Chairman of Asian Paints Manish Mahendra Choksi) ₹196.38) are also other investors.

FirstCry intends to use the net proceeds for lease payments, investment in its subsidiary and expenses related to setting up a new state-of-the-art facility and warehouse in India. The company also intends to support sales and marketing, technology and data science activities, including expenses related to cloud hosting and servers; funding inorganic expansion through acquisitions and other strategic initiatives. Brainbees’ operating income increased by 15% in FY2024 to ₹6,481 crore and losses reduced by 34% to ₹321 crore from the year.