The company, founded in 2010, last raised funds from private investors in 2018. The company is being valued at around $2.8 billion, almost similar to its valuation of $2.7 billion in 2023, according to Tracxn, a market intelligence platform.

Supam Maheshwari, chief executive officer and managing director (MD) of FirstCry, said that the decision on the valuation was taken after discussion with investors and bankers and based on the investors’ appetite.

He also said that the fresh issue size has been reduced based on the need for capital. “We realised that we do not need so much money. The last funds we raised were in December of 2018. Hence, we reduced the IPO size as there was no point in just raising funds and keeping it in the bank,” said Maheshwari, in an interaction post the IPO announcement.

FirstCry IPO, like Ola Electric, does not see many of its investors exiting. In the case of FirstCry, it is only Schroders Capital that is totally exiting, but all other investors are not exiting, including Japanese investor SoftBank.

FirstCry reported revenue of Rs 6,408.8 crore for the financial year ended March 31, 2024, up 15 per cent year-on-year (Y-o-Y). The company had a net loss of Rs 321.5 crore for FY24. The company had been profitable in FY21.

When asked why the company has not become profitable even after 14 years and being a market leader, Maheshwari said: “It takes time to build a sustainable business model in India. It is one of the toughest countries even in retail. It is highly segmented, and to build moats from scratch obviously takes time to build a profitable model.”

He did point out that the company’s adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) for the financial year 2024 for its multi-channel business is at 8.8 per cent and has improved from the earlier 6.3 per cent. Maheshwari said that profitability is something which will happen.

First Published: Aug 01 2024 | 6:41 PM IST