FirstCry: 3 Indian family investment offices pick up Rs 435-cr SoftBank stake

Three Indian investment offices acquire worth Rs 435 crore SoftBank stake in IPO-bound FirstCry

Three Indian family investment offices have picked up stake in SoftBank-backed ecommerce firm FirstCry to the tune of about Rs 435 crore. Among FirstCry's investors are Ranjan Pai's MEMG Family Office, Harsh Mariwala's Sharrp Ventures, and Hemendra Kothari's DSP family office, all of whom bought from SoftBank, the e-commerce said, as per an ET report.

FirstCry reportedly received a Rs 250 crore investment from Pai on August 14.

Moneycontrol could not independently verify this news development.

During the secondary share sale, SoftBank, which held 29% in the company, diluted its stake by about 1.5-2%.

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“Our early investors have been instrumental in our success, and we are delighted to have helped deliver multi-fold return to our investors. I welcome our new investors who bring with them an exceptional track record and knowledge of scaling large successful businesses in India, that will be highly valuable in our journey ahead,” Supam Maheshwari, chief executive of FirstCry, told ET.

Key investors

Shares are sold in part or in full to new investors in a secondary share sale, which means no money is taken from company coffers. In addition to Mahindra Retail and TPG, FirstCry also has Premji Invest, a subsidiary of Wipro's Azim Premji, as a key investor. Premji Invest holds about 9-11% in the company, while Mahindra Retail holds 12-13%.

“The founders of FirstCry have created an excellent brand through their focus on execution. We are excited about the growth in the consumer sector in India and look forward to participating in the growth of this segment,” Pai said, as quoted by ET.

According to Rishabh Mariwala, managing partner of Sharrp Ventures, FirstCry has established significant market leadership by capitalising on a first-mover advantage. According to Sharpp, the consumer theme is playing out very well in India. "We are delighted to partner FirstCry in its journey ahead with meaningful engagement,” he added, as quoted in the report. Rishabh is Harsh Mariwala’s son.

As FirstCry prepares to go public, the family investment offices have invested their capital in the firm, which has been looking to increase ownership by local investors and dilute foreign shareholders before it goes public. FirstCry is expected to file its draft IPO paper by the end of 2023, according to Navneet Govil, executive managing partner and CFO of SoftBank Vision Fund.

To comply with the country's FDI laws for ecommerce, FirstCry must keep its foreign shareholding below 51%. As a result, SoftBank is seeking to dilute its stake to under 26% so that it won't be classified as a promoter. About 9-11% of the company is owned by Premji Invest, according to the report.

This transaction was exclusively advised by Avendus Capital, the report added.