FirstCry to withdraw $500M IPO documents over SEBI's queries
What's the story
FirstCry, a prominent Indian retailer known for selling baby products, is set to withdraw its $500 million Initial Public Offering (IPO) documents as early as next week. This decision comes in the wake of inquiries from the Securities and Exchange Board of India (SEBI) regarding key metrics disclosed by the company to investors. FirstCry enjoys financial support from major backers including SoftBank, TPG, and India's Mahindra and Mahindra.
Regulatory concerns
FirstCry has to disclose all key business metrics
BrainBees, the parent company of FirstCry, submitted IPO documents to SEBI in December last year. The IPO was anticipated to be one of India's most significant this year. However, recent developments have seen SEBI notifying FirstCry about non-compliance with Indian regulations. These regulations mandate that a company planning an IPO must disclose all key business metrics shared with potential investors over the past three years.
IPO amendments
FirstCry to withdraw IPO documents, make necessary amendments
In response to SEBI's scrutiny, FirstCry plans to withdraw its IPO documents, make necessary amendments, and resubmit them as early as next week. The company had disclosed Key Performance Indicators (KPIs) such as average order value, annual transacting customers, and number of orders. This delay will impact the share sales of its investors, some of whom have held their investments for up to 10 years.
Financial performance
FirstCry's losses increased sixfold in FY23
For the fiscal year ending March 31, 2023, FirstCry reported a sixfold increase in losses, amounting to $57.6 million. Despite this, the company's total income more than doubled during the same period, reaching $684 million. The company had intended to generate approximately $215 million through new shares and an extra $300 million by selling existing shares through its IPO.