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Indian baby products retailer FirstCry’s $501 million Initial Public Offering (IPO) overcame a sluggish start to close with bids worth $3.36 billion on Thursday. Backed by prominent investors such as Japan’s SoftBank, TPG, and India’s Mahindra & Mahindra, FirstCry garnered bids for 606.4 million shares approximately 12 times the shares available according to data from the exchange. Notably, the IPO was under-subscribed until noon on Thursday but saw a significant surge in the latter half of the day.
The portion of the IPO allocated for institutional investors, including foreign investors, banks, and mutual funds, was oversubscribed 19.3 times. Retail investors, on the other hand, bid for 2.3 times the shares allocated to them. Anchor investors, such as Abu Dhabi Investment Authority (ADIA), the Government of Singapore, and Fidelity Funds, had earlier secured shares worth 18.86 billion rupees ahead of the bidding date.
FirstCry, which specializes in selling baby products including clothes, diapers, and toys, is the first pure-play baby products and childcare retailer to go public in India. The company faces competition from online kids’ store Hopscotch and, in certain segments, from domestic firms like Shoppers Stop and Myntra, which is owned by Walmart’s Flipkart.
Kranthi Bathini, director of equity strategy at WealthMills Securities, highlighted that FirstCry is well-positioned as a key beneficiary in the infant-centric business space, particularly as India’s childcare market appears increasingly attractive. He further noted that FirstCry’s portfolio of premium products aligns with the upward momentum of disposable income in the country, which bodes well for the company’s future growth.
The IPO is part of FirstCry’s strategy to capitalize on India’s booming stock market, which has hit record highs over 50 times this year. The funds raised from the IPO will be used for acquisitions, international expansion, and the establishment of new stores and warehouses in India. FirstCry originally submitted its IPO paperwork in December 2023 but later withdrew the proposal earlier this year after the country’s market regulator raised concerns about the key metrics presented to investors.