Mahindra & Mahindra Ltd’s subsidiary Mahindra Retail will divest around 2% of its shareholding in BrainBees Solutions Pvt Ltd (BrainBees), which owns and operates online-first baby products retailer FirstCry, as part of share sale in the proposed initial public offering (IPO).
Backed by multiple large investors including SoftBank and National Investment and Infrastructure Fund (NIIF), BrainBees is set to file for an IPO targeting to raise $700 million (around Rs 5,380 crore). The issue size could also increase to $1 billion (Rs 7,600 crore).
“The Strategic Investment Committee of the Board of Directors of the M&M today considered and accorded its approval to divest up to 94,46,156 (94.46 lakh) Equity Shares of Rs 2 each representing up to 2%...of Brainbees Solutions Private Limited (BrainBees) on a fully diluted basis, by way of Offer for Sale of Equity Shares as part of the proposed IPO of BrainBees,” Mahindra & Mahindra informed in a regulatory filing.
The actual number of shares of BrainBees to be divested will be decided by the Company in due course. The selling price per equity share will be decided with the merchant bankers, it further said.
In 2015, Mahindra Group, which ran the country's top offline baby products chain Mom & Me, acquired FirstCry's key rival BabyOye. A year later, Mahindra merged BabyOye with FirstCry to create the top player in the vertical.
With this, Mahindra Retail, subsidiary of Mahindra & Mahindra Ltd, picked up a minority stake in BrainBees.
As of March end 2021, Mahindra Retail Ltd owned 10.48% while Mahindra Engineering and Chemical Products Ltd held 3.11% as preference shares.
Last week, the Supam Maheswari-led e-commerce firm’s board, as per reports, passed a resolution to convert it from a private to public entity renaming itself as Brainbees Solutions Limited.
Pune-based Brainbees joined the much-coveted unicorn club in February 2020 after raising $300 million from Japan’s SoftBank Group, through its Vision Fund, which holds 46.61%, according to VCCircle’s data platform VCCEdge.
Last year, BrainBees raised around $315 million from TPG Growth, ChrysCapital and Premji Invest at around $1.9-2.1 billion valuation. In February this year, NIIF made an investment in BrainBees, its first new-age investment.
IDG Ventures, Valiant Capital Partners and New Enterprise Associates are among its other key investors.
Founded in 2010 by Supam Maheshwari and Amitava Saha, Brainbees offers kid products across categories that include diapers, feeding and nursing, skin and health care, toys, clothes, footwear, and fashion accessories.
It also launched a Thrasio-styled venture named GlobalBees last year.
BrainBees further ventured into the pre-primary education segment in 2019 by acquiring Oi Playschool for an undisclosed sum.
For FY21, BrainBees posted a profit after tax of Rs 215.94 crore, a substantial jump from a loss of Rs 190.8 crore in FY20. Its consolidated total revenue rose to Rs 1,740 crore, a 141% year-on-year increase from Rs 896.7 crore.
