Blog

 Brainbees Solutions Limited offers products for mothers, babies, and Kids via its online platform ‘FirstCry’. Brainbees Solutions (Firstcry) IPO is set to raise Rs 4,193.73 crores. The issue is a combination of fresh issue of 3.58 crore shares aggregating to Rs 1,666 crores and offer for sale of 5.44 crore shares aggregating to Rs 2,527 crores.

Brainbees Solutions: About The Company

• The company was incorporated in 2010 as “Brainbees Solutions Pvt. Ltd” at Pune, Maharashtra.
• Brainbees Solutions is the India’s largest multi-channel retailing platform for Mothers’, Babies’ and Kids’ products, in terms of GMV for FY2024.
• It also has presence in select international markets.
• The company operates in the retail category with high purchase frequency consumables like diapers and other baby products along with other needs that evolve with age. The company offers products from third-party Indian brands, global brands, and home brands through online platform and modern retail stores.
• The company launched an online platform FirstCry in 2010, as a one-stop destination for parenting needs across commerce, content, community engagement, and education.
• As at March 31, 2024, the company’s multi-channel retailing platform had an integrated supply chain consisting of 80 warehouses and stockists across 47 cities in India.
• The company also operates a network of pre-schools in India.

Brainbees Solutions IPO: Financials

Anchor Book: Brainbees Solutions IPO

• As part of IPO, the online e-commerce platform raised Rs 1,886 crore from anchor investors by allotting 4.05 crore shares to 71 funds at Rs 465 apiece,
• Through the OFS, SVF Frog, a Cayman Islands-registered entity of Softbank, will sell 2.03 crore equity shares, and automaker Mahindra & Mahindra (M&M) will offload 28.06 lakh shares. Apart from Softbank and M&M, other selling shares in the OFS are PI Opportunities Fund, TPG, NewQuest Asia Investments, Apricot Investments, and Schroders Capital. Further, individuals selling shareholders include veteran industrialist Ratan Tata.
• The Government of Singapore, Nomura Funds, Abu Dhabi Investment Authority, Fidelity Funds, Goldman Sachs Funds, Citigroup Global Markets Mauritius, SBI Mutual Fund (MF), ICICI Prudential MF, HDFC MF, Kotak MF and SBI Life Insurance Company are among the anchor investors.

Salient Points: Brainbees Solutions IPO

• Currently, Softbank holds a 25.55 per cent stake in Brainbees Solutions, and M&M owns a 10.98 per cent stake in the multi-brand retailing platform.
• Through the OFS, SVF Frog, a Cayman Islands-registered entity of Softbank, will sell 2.03 crore equity shares, and automaker Mahindra & Mahindra (M&M) will offload 28.06 lakh shares. Apart from Softbank and M&M, other selling shares as part of OFS are PI Opportunities Fund, TPG, NewQuest Asia Investments, Apricot Investments, and Schroders Capital. Individuals selling shareholders include industrialist Ratan Tata.
• The company will use the net proceeds from the fresh issue to set up new modern stores under the brand ‘BabyHug’, invest in subsidiaries, expand overseas, and implement sales and marketing initiatives. A portion will also be used for general corporate purposes.
• The growth in company’s revenues has been driven by both organic growth and inorganic growth . They did acquisition of Digital Age in May 2022.
• Company’s revenues grew to ₹ 6,480.86 Cr in FY2024 from ₹ 2,401.29 Cr in FY2022.
• The Gross Margin was 35.76% in FY2024 vs.34.53% in FY2022.
• The company’s net working capital days were 53 days vs. 102 days in FY2022.
• Compared to listed peers :No peers in the true sense, but compared to some similar platforms in Travels and payment card business, issue is fully priced and even expensive.
• Company continues to be Loss making at net level.
• Valuation looks very expensive and nothing or little has been left on the table for listing gains.
• Company has established a Strong Brand awareness amongst young parents.
• I am likely to apply for IPO provided QIB response is quite good. despite many negativities there is good scope for business to grow in future. Listing gains are difficult to predict but this issue looks better than Ola IPO to me. Performance compared to other startup’s like Nykaa is not up to the mark but it has developed strong brand over the years in niche category and may see good growth and profits in years to come.
• GMP as reported on social media has been Rs. 28 (6.0%)
• This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.