IPO-bound FirstCry's CEO offloads shares worth Rs. 300cr
Supam Maheshwari, the founder and CEO of FirstCry, a popular omnichannel kidswear brand, has sold over 1% of his equity in the company. This move came just days before the filing of the IPO prospectus. Maheshwari's stake in the company dropped from 7.46% to 5.95%, resulting in the sale of 62 lakh shares. Based on the highest share price in the past year, this stake sale is estimated to be worth around Rs. 302 crore.
Share sale valuation and IPO pricing
FirstCry's IPO is expected to be priced at a valuation of $3.5-3.75 billion. At the upper end of the range, it would be a 31% premium for those who bought the shares at Rs. 487.44 each in December. Major selling shareholders include Softbank Group, Mahindra & Mahindra, PI Opportunities Fund, TIMF Holdings, Think India Opportunities Fund, TPG, NewQuest Valiant Partners, and others.
IPO details and selling shareholders
Around 60% of the IPO amount will be an offer-for-sale while the remaining will be a fresh issue. Share price details remain undisclosed as of now. SoftBank is FirstCry's largest shareholder, holding a 25.5% stake in the start-up. Mahindra & Mahindra comes in second with a 10.98% stake. Ratan Tata, Chairman Emeritus of Tata Sons, will also sell all his 77,900 shares.
Expansion plans and financial performance
The net proceeds from the IPO will be used to expand stores in India and Saudi Arabia, and clear leases for existing Indian stores. As of June 30, 2023, Brainbees, FirstCry's parent company, owned a total of 936 stores. Out of these, 321 were company-owned and operated. Over the next three fiscal years, the company plans to open 336 new BabyHug brand stores and 147 FirstCry brand stores.
Maheshwari's remuneration and ESOPs
Maheshwari took home a remuneration of Rs. 200 crore in FY23, Rs. 29 crore in FY22, and Rs. 14 crore in FY21, including short-term employment benefits and share-based payments accrual. In Q1 FY24, Maheshwari's remuneration was Rs. 26 crore. FirstCry's ESOP costs or share-based payment expenses doubled from Rs. 46 crore in FY21 to Rs. 92 crore in FY22. These expenses then jumped almost four times from Rs. 92 crore in FY22 to Rs. 361 crore in FY23.
