SoftBank valuing FirstCry IPO secondary market share sale at $4B

SoftBank and NewQuest Capital partners are contemplating selling some shares in FirstCry in the secondary market. FirstCry’s IPO will happen in a couple of months as per the plans made earlier. The company is being valued at $3.5 to $4 billion from the share sale. Read along to know more.


The What and Why

According to the reports from The Economic Times, SoftBank has a 29 percent stake in FirstCry which it is planning to bring down to 25 percent with the sale. At present, the Japanese fund led by Masayoshi Son is the largest shareholder in the company. There have been talks between FirstCry and Kedaara Capital, a private equity firm based in Mumbai, regarding the participation in the secondary round.

If the deal becomes successful, it will go down as the third major secondary share sale at FirstCry. If the deal goes through without any hurdles, it will raise FirstCry’s total valuation from $2.7 billion in the previous secondary share sale which happened earlier this year to a whopping $4 billion.

According to information from the Economic Times, “This is akin to a pre-IPO deal which will set the price for the company and ideally it wants to bring on board domestic funds.” The pre-IPO requirement Draft Red Herring Prospectus will be filed by the company soon.

Earlier this year, Premji Investment led an investment worth $315 billion following which FirstCry was valued at $2.7 billion. As of now, Premji Investment has a stake of 9-11 percent in the company. In addition to Premji Investments, there are other major shareholders as well. This includes Mahindra Retail with a 12-13 percent stake, and TPG, a private equity firm based in the US with a 5-6 percent stake in the company.

FirstCry is striving to eventually bring down its foreign ownership, thereby allowing Indian private equity players to take the field.