IPO-bound FirstCry, backed by SoftBank, reports Rs 585 crore loss in FY23 owing to mounting expenses

FirstCry, an e-commerce platform catering to mother and child care, is gearing up for a significant financial move as it sets its sights on an initial public offering (IPO). Reports indicate the company is poised to file a draft paper for its IPO shortly. This development follows the disclosure of their financial figures for the fiscal year 2023, revealing both remarkable growth in revenue and an exponential increase in losses.

In the fiscal year 2023, FirstCry disclosed a substantial revenue increase of Rs 5,632 crore from its operational activities. This marks a notable surge, accounting for approximately 2.4 times growth compared to the preceding fiscal year.

However, concurrently, the company faced a substantial setback as its losses skyrocketed to Rs 585 crore before exceptional items and tax.

Their financial statement indicated a notable increase in income alongside a substantial surge in expenses like depreciation of Rs 294 crores, finance cost of Rs 72 crores and ESOP costs at Rs 361 crore, leading to a considerable decrease in profits.

"The core business remains to grow strongly with positive bottom line and profitability and the overall business growth is at 135 percent," the company said in a statement.

Eyeing a public listing, FirstCry aims to raise a substantial capital ranging between $500 to $600 million, valuing the company at $4 billion. This strategic move is anticipated to fuel the company's expansion and enhance its market presence.

In parallel developments, reports have surfaced indicating that SoftBank, the Japanese investment giant and a key backer of FirstCry, has undertaken a substantial sale of its holdings in the company. SoftBank reportedly divested shares amounting to approximately $310 million in a second-round sale, equating to around Rs 630 crore. Notably, SoftBank had initially injected $400 million into FirstCry at a valuation of approximately $900 million.

An earlier report from MoneyControl, citing insider sources, shed light on FirstCry's fundraising ambitions, indicating a target of $500 million. A majority of this sum, around 60 per cent, is expected to be directed towards the offer for sale (OFS) component, while the remainder will be allocated to the primary segment to facilitate further growth and development.