Supam Maheshwari, the founder and CEO of FirstCry, strategically sold 62 lakh shares of the company merely 10 days before filing for its initial public offering (IPO). Each share was sold at Rs 487.44, marking the highest price for a secondary share sale in December. According to the draft red herring prospectus (DRHP), this move values Maheshwari’s offloaded shareholding at over Rs 300 crore, solidifying his position as a selling shareholder in the upcoming public issue.
Before the IPO filing, Maheshwari held 35,097,831 shares, representing a 7.46 per cent stake in the company. After the recent share sales, his stake has decreased to 28,893,347 shares, equivalent to a 5.95 per cent stake. The sale is significant as it aligns with the company’s IPO expectations, with estimates placing FirstCry’s valuation between Rs 29,100 crore and Rs 31,179 crore ($3.5-3.75 billion).
It is noteworthy that apart from SoftBank, Maheshwari also participated in a recent share sale round, contributing to the company’s valuation of over Rs 23,000 crore. The IPO aims to raise Rs 1,816 crore, featuring an Offer for Sale (OFS) window wherein existing investors, including Mahindra & Mahindra (M&M), SoftBank, Premji Invest, TPG, and Newsquest, will collectively sell 5.4 crore shares.
Despite the anticipated success of the IPO, FirstCry reported a notable increase in losses, surging from Rs 79 crore in FY22 to Rs 486 crore in FY23. Maheshwari’s stake in the company witnessed fluctuations, reducing to 5 per cent by the end of FY21, and then rising to 17 per cent by the end of FY22.
The DRHP report also sheds light on Maheshwari’s earlier offloading of 9.34 million shares in the six months leading up to the IPO filing, valuing the share transfer at over Rs 455 crore. As the company positions itself for a public offering, the strategic share transactions by its CEO underscore the dynamic nature of the e-commerce platform’s financial strategies.
The IPO’s success will not only hinge on the company’s valuation but also market perceptions, given the recent shifts in shareholding and the evolving landscape of the e-commerce sector.
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