FirstCry, a prominent e-commerce platform specializing in mother and child care, is making headlines as it gears up for a significant financial move—the launch of its initial public offering (IPO). The company’s recent disclosure of financial figures for the fiscal year 2023 reveals a remarkable surge in revenue, coupled with an exponential increase in losses. As FirstCry prepares to file a draft paper for its IPO, key insights into its financial performance and strategic plans come to the forefront.
Revenue Surge and Exponential Losses:
In the fiscal year 2023, FirstCry reported a substantial revenue increase, reaching Rs 5,632 crore from its operational activities. This impressive growth represents a notable 2.4 times increase compared to the preceding fiscal year, underlining the company’s robust performance in the market. However, alongside this revenue surge, FirstCry faced a significant setback as its losses soared to Rs 585 crore before exceptional items and tax.
The financial statement highlights a marked increase in income, accompanied by a substantial surge in expenses. Key contributors to the rising expenses include depreciation costs of Rs 294 crores, finance costs of Rs 72 crores, and Employee Stock Ownership Plan (ESOP) costs at Rs 361 crore. These factors collectively contributed to a considerable decrease in profits for the company.
FirstCry’s Positive Outlook:
Despite the increase in losses, FirstCry emphasizes that its core business remains robust, demonstrating positive bottom-line growth and profitability. The overall business growth is reported at an impressive 135 percent, indicating the company’s resilience in a competitive market.
IPO Plans and Capital Infusion:
Eyeing a public listing, FirstCry aims to raise substantial capital, with estimates ranging between $500 to $600 million. This move is expected to value the company at an impressive $4 billion and is strategically designed to fuel further expansion and enhance its market presence. The fundraising ambitions align with reports suggesting that approximately 60 percent of the targeted sum will be directed towards the offer for sale (OFS) component, while the remaining 40 percent will be allocated to the primary segment for continued growth and development.
SoftBank’s Share Divestment:
In parallel developments, reports have emerged regarding SoftBank, a key investor in FirstCry, undertaking a substantial sale of its holdings in the company. The Japanese investment giant reportedly divested shares worth around $310 million in a second-round sale, equivalent to approximately Rs 630 crore. SoftBank’s initial injection of $400 million into FirstCry, valuing the company at around $900 million, underscores the substantial growth and potential perceived by one of its major backers.
As FirstCry charts its course towards an IPO, the company’s strong revenue growth, coupled with strategic capital infusion plans, indicates confidence in its future prospects. The evolving dynamics, including SoftBank’s divestment, add an interesting layer to the narrative, reflecting the complex interplay of investors in the ever-evolving landscape of e-commerce and child care-focused businesses. FirstCry’s journey to the public markets will undoubtedly be closely watched, offering insights into the investor sentiment and market appetite for companies operating in the mother and child care sector.