SUMMARY
The startup plans to utilise the greatest chunk of the proceeds, INR 388.2 Cr, for investment in its subsidiary Digital Age Retail
Its investment plan for overseas expansion, which amounts to INR 155.6 Cr, remains unchanged
It will utilise INR 150 Cr for investment in sales and marketing initiatives, a 50% increase from the erstwhile INR 100 Cr
Kids-focussed omnichannel retailer firstcry has made slight changes in the way it plans to utilise the capital raised from fresh issuance of shares as part of its initial public offering (IPO), as per the updated DRHP filed by the unicorn with the Securities and Exchange Board of India (SEBI).
The IPO offer, which comprises fresh issuance of shares worth INR 1,816 Cr and an offer-for-sale (OFS) component of 5.4 Cr equity shares, remains unchanged from the previous DRHP filed by the unicorn.
The startup now plans to utilise the greatest chunk of the proceeds, INR 388.2 Cr, for investment in its subsidiary Digital Age Retail, which is into multi-brand retailing and operates FirstCry’s online platform and mobile application.
Of the INR 388.2 Cr, GlobalBees, the parent of FirstCry, plans to invest INR 222.2 Cr to establish new modern stores under the FirstCry brand and other brands of the company, while INR 166 Cr will be used for the lease payments of existing stores owned and controlled by Digital Age.
As per the company’s earlier DRHP, FirstCry planned to invest INR 648 Cr from the IPO proceeds for setting up modern stores and warehouses and making lease payments for existing stores.
However, its investment plan for overseas expansion, which amounts to INR 155.6 Cr, remains unchanged. The startup will still invest INR 83 Cr to set up new warehouses in Saudi Arabia and INR 72.6 Cr to set up modern stores in the country. However, it did not specify the number of stores and warehouses it plans to set up in the country.
Another investment which saw a slight change from its previous IPO papers is towards its subsidiary Globalbees Brands’ acquisition of additional stake in the company’s step down subsidiaries. The company will be investing INR 173.59 Cr as compared to INR 170.5 Cr as per the earlier DRHP.
It will utilise INR 150 Cr for investment in sales and marketing initiatives, a 50% increase from INR 100 Cr, as per the earlier DRHP. Meanwhile, it will utilise INR 57.6 Cr for technology and data science costs.
Besides, the company will also allocate INR 140.7 Cr to set up new modern stores and warehouses for its brand ‘BabyHug’. Under BabyHug, FirstCry sells clothes, baby gear, nursery, diapering, toys, among others, for babies.
According to the DRHP, the rest of the IPO proceeds would be used to fund inorganic growth and other corporate purposes.
It is pertinent to note that the startup refiled its DRHP after SEBI raised questions over key metrics disclosed by FirstCry in its earlier draft documents.
The unicorn also disclosed its financial numbers for the first nine months of FY24 in the updated DRHP. The omnichannel retailer reported a net loss of INR 278.2 Cr for the nine months ending December 2023, while revenue stood at INR 4,814 Cr during the period.
