Indian baby products retailer FirstCry's $501 million IPO overcame a sluggish start to garner bids worth $3.36 billion at close of the share sale on Thursday, as investors bet on growth for baby and child products in the world's most populous country.
FirstCry, backed by Japan's SoftBank, TPG and India's Mahindra & Mahindra, received bids for 606.4 million shares, about 12 times the shares on offer, exchange data showed. The issue was under-subscribed till noon on Thursday.
The portion of the IPO allocated for institutional investors, including foreign investors, banks and mutual funds was oversubscribed 19.3 times, while retail investors bid for 2.3 times the shares on offer for them.
Anchor investors, including Abu Dhabi Investment Authority (ADIA), the Government of Singapore and Fidelity Funds bought shares worth 18.86 billion rupees ahead of the bidding date.
FirstCry, which sells baby products including clothes, diapers and toys, is the first pure-play baby products and childcare retailer to go public in India.
It competes with online kids' store Hopscotch, and in some segments with domestic firms Shoppers Stop and Myntra, which is owned by Walmart's Flipkart.
The company is a key beneficiary among the businesses that are centric to infants, said Kranthi Bathini, director of equity strategy at WealthMills Securities, adding that the child care market looks attractive in the world's most populous country.
FirstCry's portfolio of premium products bodes well for the its growth as disposable income in India is seeing an upward momentum, Bathini said.
FirstCry sought to cash in on the country's red-hot stock market that has hit record highs more than 50 times this year. The share sale followed IPOs of companies like Ola Electric, Allied Blenders and Emcure Pharmaceuticals.
It will use the funds for acquisitions, international expansion and to set up new stores and warehouses in India.
The company filed papers for its public float in December 2023, but withdrew the proposal earlier this year after the country's markets regulator raised concerns about raised questions over key metrics it disclosed to investors.