An insolvency petition has been launched against GlobalBees Brands, a significant subsidiary of Brainbees Solutions, the parent company of well-known baby products retailer FirstCry, in a significant development that could upend one of India’s leading consumer brand aggregators. The case demonstrates growing financial strain, legal complications, and conflicts over outstanding debts.
Credits: startuptalky
Insolvency Petition Filed Over ₹65 Crore Dues
In a stock market statement on June 18, Brainbees Solutions revealed that Ashutosh Garg, Paritosh Garg, and Manju Agarwal had filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) with the National Company Law Tribunal (NCLT) in New Delhi. They want to launch corporate insolvency procedures against GlobalBees for alleged unpaid debts of ₹64.92 crore, plus 18% annual interest beginning on May 9, 2025.
This legal action highlights the mounting financial strain on India’s house-of-brands ecosystem, particularly in light of a wider funding freeze and more stringent investor monitoring.
GlobalBees Pushes Back: To Contest the Plea
Brainbees has claimed that GlobalBees is actively seeking legal advice and plans to defend the insolvency application even at the acceptance stage, notwithstanding the seriousness of the claim.
It is “not possible at this stage to determine the financial impact,” the company emphasized in its filing, adding that the outcome will depend on how the legal processes and any future challenges play out.
GlobalBees, which was established to buy and grow digital-first consumer brands, has garnered a lot of interest from investors recently and was even dubbed a “soonicorn” in India’s rapidly expanding D2C market. If the insolvency plea is successful, the protracted litigation may negatively impact its business and reputation.
FirstCry’s Mounting Losses Add to Pressure
The insolvency issue comes at a time when FirstCry itself is grappling with growing financial stress. As per its May 26 business filing, FirstCry reported a net loss of ₹111.5 crore for Q4 FY25, more than doubling from ₹43.2 crore in the same quarter last year. Notably, the March quarter also included a one-time loss of ₹36.7 crore, which weighed heavily on its bottom line.
While quarterly losses widened, FirstCry managed to reduce its full-year net loss by 18%, reporting ₹264.8 crore in FY25 compared to ₹321.5 crore in FY24. However, the path to profitability still seems distant.
Revenue Growth Slows Amid Quarterly Dip
Despite the challenges, FirstCry posted year-over-year revenue growth, with Q4 FY25 operating revenue rising 16% to ₹1,930.3 crore, up from ₹1,668.9 crore in the same period last year. However, quarter-over-quarter revenue declined by 11%, slipping from ₹2,172.3 crore in Q3 FY25.
On a full-year basis, the company saw a 19% increase in consolidated operating revenue, reaching ₹7,810.1 crore in FY25, compared to ₹6,550 crore in FY24.
But this growth comes with growing costs. Brainbees’ total expenses surged 17% YoY in Q4 to ₹1,914.4 crore, with FY25 expenses hitting ₹7,429.6 crore, up from ₹6,410.4 crore in FY24.
Regulatory Raid Adds to Woes
To make matters worse, FirstCry faced regulatory heat right after its earnings announcement. Reports revealed that the Bureau of Indian Standards (BIS) conducted a search and seizure operation at a FirstCry warehouse. Products including toys and sippers worth nearly ₹1.43 crore were seized for allegedly being sold without the mandatory BIS certification.
This action could not only damage FirstCry’s credibility with parents and regulators but might also invite penalties or further scrutiny.
Credits: The Morning Context
Looking Ahead: Uncertain Terrain
As Brainbees and its subsidiary GlobalBees navigate this storm, the immediate future looks uncertain. The outcome of the insolvency plea will be closely watched, not just by stakeholders but also by the wider startup ecosystem, which sees FirstCry as one of India’s marquee retail-tech players.
With growing financial pressure, a regulatory cloud, and legal challenges, the group’s ability to maintain momentum—and investor confidence—will be severely tested in the coming quarters.
