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Incorporated in 2010, Brainbees Solutions Ltd operates one of the largest multichannel retail platforms under the brand ‘firstcry’ with a niche focus in Mothers, Babies and under 12 kid’s products. Firstcry has forayed into international markets and runs online store in UAE (since 2019) and Saudi Arabia (since 2022). To further leverage its experience in creating and scaling up brands, Company has established a platform named ‘Globalbees’ where Indian and Global D2C brands sell their products online and offline through modern stores. In extension of providing holistic services in parenting categories, company also provides parenting content, develops a rapport with mothers at a very early stage of conception and extends this bond by even providing pre-primary schools.

Details of the Issue:

* Total issue of Rs. 4,194 Cr, consists of offer for sale amounting to Rs. 2,528 cr and fresh issue of Rs.1,666 Cr

* The funds would be used for setting up new modern stores under the ‘BabyHug’ brand and setting up warehouses.

Investment Rationale:

* Leadership status in a niche segment

* Growth in International Business

* Improvement in Financials

Valuation and Recommendation:-

Firstcry has created a niche space in the mothers and early kids age category and has strong brand reminiscence as well. Revenues have grown at CAGR of 34% during FY22- 24 on performa adjusted revenue growth. While India business has been making margins of ~ 9%, its International business continues to bleed at operating level. However, Management is confident of replicating India success story there as well. On the backdrop of changing retail and ecommerce dynamics, mother and childcare product market is expected to grow at a CAGR of 13-15% during FY24-29. Firstcry’s shares are available at EV/sales of 3.8x FY24 which is lower as against NYKA which is trading at 8.4x. Given Firstcry’s leadership position in the niche segment of baby products, we recommend Subscribe to the issue for long term gains.

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SEBI Registration number is INH000001766