FirstCry IPO enhanced our corporate governance and disclosures, says founder and CEO Supam Maheshwari

Supam Maheshwari, Firstcry MD and CEO

It’s not often that you come across an entrepreneur who has founded not one, not two but three unicorns. All in under a decade and while building from Pune, away from the hype of larger startup hubs such as Bengaluru, NCR and Mumbai. Meet Supam Maheshwari, the founder of FirstCry, XpressBees and GlobalBees.

In an interview ahead of FirstCry’s IPO listing on August 13, the usually reticent Maheshwari, opened up to Moneycontrol on taking a company public, creating value for investors and why he’s not jittery about facing a wider set of shareholders.

He added that FirstCry's 14-year-long history gives him an edge over the other new-age companies that are listing a few years after being founded. The mother and baby care retailer's IPO opens for public subscription on August 6 and closes on August 8 and has a price band of Rs 440-465.

Edited excerpts:

You have a valuation of $2.9 billion for your IPO which is a 5-10 percent discount to your last private market valuation. Was this based on feedback you received during the roadshows?

We got a very good response from the 100 plus meetings that we did with domestic, foreign, public, institutional, private and public market investors. The price band was decided after feedback from our bankers. It was recommended by our board of directors.

What does this IPO mean for you personally? You earlier had a venture called Brainvisa and now run three unicorns – FirstCry, Xpressbees and GlobalBees. Will this be the first of many IPOs from Supam’s stable?

You're putting a lot on my shoulder. I've been an entrepreneur almost all my life and I wanted to be like that. With God's grace and my family's blessings, it's been like that and they have been very supportive throughout my journey. FirstCry operates in a $120 billion total addressable market (TAM) and very few entrepreneurs get to operate out of a large TAM and we will continue to grow.

And for Xpressbees, and other companies we have teams that will decide on their own what they have to do for their journey forward.

SEBI returned your draft IPO papers and you refiled it with more information. What was your learning? Is it becoming tougher for new-age companies to list?

We've been running FirstCry for the last 14 years now. So, it's not like a three-four year old company. We provided additional inputs and refiled within 15 days. We’ll be able to raise our own corporate governance standard in terms of disclosures and so on and so forth.

We were lucky that we could get to this particular milestone within no time. We filed the first one in December end and then by April end, the updated next one. But it anyway takes that much time even if the first draft would have passed.

There is no pressure for a company of our stature, size and maturity curve. What is the pressure if you have been delivering operational profitability for the last four years. Our adjusted EBITDA grew from 5.9 percent in FY22 to 6.2 percent in FY23 and to 8.8 percent in FY24.

So we are very conscious of profitability and operational profitability. I'm as calm as I was and I hopefully will remain as calm and as poised on that front because it's exciting.

FirstCry IPO is valued at a revenue multiple of about 3.5X. Are you happy? Could you have pushed it further?

This is just a milestone for us in a long number of years if we have to create more value. This milestone is more important. To be able to get this milestone for my family, my colleagues, their families, our employee base, and others. We have very high corporate governance standards with our independent board members and overall board.

So, we believe we'll be able to raise the bar.

Give us a sense of your store openings, the throughput, the efficiency that you're seeing and how do you see legacy e-commerce versus quick commerce unfolding? Do you have ambitions for quick commerce play?
We were the pioneers of omnichannel. We started in 2010 and had our first offline store in 2011. As mentioned, we’ll open 350 offline stores with the fresh proceeds. Our costs, especially marketing costs have reduced consistently over the years.

We offer same-day delivery in 47 cities and next-day delivery in over 1,000, which is already a very large network. No other company likely matches this reach in the baby and kids category.

On quick commerce, as per my outside view, it's a great model, but time will tell where it will stabilise in terms of the category mix and economics. No plans yet.

So GlobalBees is also growing very fast for you. Do you envisage a time when this horizontal play for you could become bigger than vertical?

I think it's early. We will continue to compound our growth story in all three segments – India, multi channel, international as well. Globalbees reported Rs 1,209 crore in revenue and accounted for 18 percent of the parent company's revenue.

We've also noticed that you've slightly reduced the fresh issue size from Rs 1,816 crore to Rs 1,666 crore. Why is that?

We had a provision in the DRHP to reduce the size of fresh issue and based on the feedback from our book running lead managers (BRLMS) and after discussing internally we reduced the size. Nothing else.

Will international be the next big TAM for you? Saudi Arabia, the Middle East and other markets will they be your next catchment area?

TAM wise, India is $68 billion, international will be $11 billion and global D2c is around $34 billion. All three segments will continue to meaningfully grow for us, not just international. As India progresses, all of the unorganised will become organised.

So being the largest player in the organised sector, we will benefit from that tailwind.

For FirstCry, international revenue was around Rs 750 crore in FY24. So not not that big, but it will continue to grow. It grew 55 percent last year.