FirstCry withdraws $500 million IPO papers amid regulatory scrutiny – Republic World

Divestment of FirstCry CEO Supam Maheshwari | Image: FirstCry CEO Supam Maheshwari

FirstCry IPO: FirstCry, India’s prominent retailer specializing in baby products, is all set to withdraw its $500 million Initial Public Offer (IPO) papers as early as next week. The move comes in response to heightened scrutiny from the Securities and Exchange Board of India (SEBI), which has raised concerns over crucial figures disclosed to potential investors, Reuters news agency reported, citing three sources directly familiar with the case.

Backed by major investors such as SoftBank, TPG and India’s Mahindra and Mahindra, FirstCry has established itself as a major player in the baby products market, with a wide range of items including clothes, diapers and toys that meet the needs of new generations . parents in the country.

FirstCry’s parent company BrainBees filed papers with India’s Securities and Exchange Board last December, outlining plans for one of the country’s largest initial public offerings this year. While the company aimed to raise around $215 million through new shares, another $300 million was expected from the sale of existing shares, according to the report.

However, recent communications from SEBI to the company revealed non-compliance with Indian regulations mandating the inclusion of all material company data shared with potential investors in the last three years in IPO documentation. Notably, SEBI implemented this requirement in 2022 to improve oversight of companies seeking stock exchange listing, particularly in response to concerns over the valuation of large loss-making entities.

Among the key performance indicators (KPIs) highlighted in FirstCry’s documents are average order value, annual number of customer transactions and number of orders processed, which provide insight into the company’s operational performance.

FirstCry is now expected to withdraw its IPO papers, make necessary revisions and resubmit them in the coming week, the report said.

According to draft documents, for the fiscal year ending March 31, 2023, FirstCry witnessed a significant increase in losses, which escalated sixfold to $57.6 million. In contrast, total revenues more than doubled to $684 million over the same period, underscoring the complexity of its financial performance.

(With Reuters input.)