firstcry ipo: Ratan Tata to sell all his 77,900 shares in FirstCry IPO

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NEW DELHI: Tata Sons Chairman emeritus Ratan Tata, who turned 86 today, will sell 77,900 shares of kidswear startup FirstCry in its upcoming IPO in 2024.

The business tycoon had picked up a 0.02% stake for Rs 66 lakh in Brainbees Solution, which operates omnichannel businesses of kidswear under the brand name FirstCry, in 2016.

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The average cost of acquisition of shares by Tata comes to Rs 84.72 per share, shows FirstCry’s draft red herring prospectus (DRHP) filed with the market regulator Securities and Exchange Board of India (Sebi). His total investment in the company, therefore, comes to about Rs 66 lakh.

The octogenarian industrialist, who led the Tata Group for decades, has been transformed into an angel investor for scores of startups like eyewear retailer Lenskart, digital payments brand Paytm, electric vehicle startup Ola Electric Mobility, and online stock trading platform Upstox.

While the size of FirstCry IPO is not yet known, it includes a fresh issue of shares worth up to Rs 1,816 crore. The offer for sale (OFS) part includes offloading up to 54.4 million shares by existing investors like SoftBank, Mahindra & Mahindra (M&M) US private equity fund TPG.

SoftBank-operated SVG Frog is selling 2.03 crore shares, while M&M plans to sell up to 28.06 lakh shares of the company in the IPO.

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Other selling shareholders include PI Opportunities Fund, TPG, NewQuest Asia, Apricot Investments, Valiant Mauritius Partners, TIMF Holdings, Think India Opportunities Master Fund, and Schroders Capital Private Equity Asia.SoftBank is FirstCry’s biggest shareholder and holds a 25.5% stake in the startup, followed by M&M’s 10.98% stake.

Among other individual selling shareholders, FirstCry Co-Founder and CEO Supam Maheshwari is divesting 18.24 lakh shares out of 2.89 crore shares in his pocket. Ahead of the IPO, Maheshwari held a 5.95% stake in the company.

FirstCry, which saw its losses widen six-fold in fiscal 2022-2023 due to rising costs, said it would use funds from the IPO to expand stores in India and Saudi Arabia and to clear its leases for existing Indian stores.

As of June 30, 2023, Brainbees owned a total of 936 modern stores, out of which 321 were company-owned and company-operated. In the next three fiscal years, it plans to set up 336 new stores measuring an aggregate of approximately 0.59 million square feet under the BabyHug brand. It also plans to add another 147 stores measuring approximately 0.51 million square feet under the FirstCry brand and other home brands.

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