Did you know THIS about FirstCry IPO | CA Rachana Ranade

Summary

CA Rachana's IPO summary video introduces Brainbees Solutions Limited, known for its retail platform First Cry, India's largest for mothers, babies, and kids. The company operates multi-channelly, with a significant online presence and physical stores. The video discusses the company's target audience, product range, and the potential of the child care industry in India, which is growing with a young population. It also covers the financials, risks, and objectives of the IPO, advising investors to consider both the company's fundamentals and the current market sentiment.

Takeaways

• 😀 Brainbees Solutions Limited, known for its brand First Cry, is India's largest multi-channel retailing platform for mothers, babies, and kids products.
• 🛒 First Cry operates through various channels including online sales, company-owned stores, franchise-owned stores, and general trade retail.
• 👶 The primary target audience for First Cry is mothers, babies, and kids, offering a wide range of products such as baby clothes, toys, strollers, car seats, and maternity wear.
• 📈 Childcare is considered a non-discretionary essential expense, making parents perpetual customers and potentially allowing for predictable cash flows from parents.
• 🌍 India has a large and young population with approximately 30.6 CR children under the age of 12, making it a significant market for children's products.
• 💼 The apparel segment is the largest in the children's market, accounting for almost 68% of the total market as of 2024.
• 📊 The Indian children's market is estimated to grow at a CAGR of 12-14% and is expected to grow at 13-15% between 2024 and 2029.
• 💰 Indian parents spend an average of around 9,000 to 9,300 per child per year, which is significantly lower compared to other countries like China, Saudi Arabia, UAE, UK, and the US.
• 🏢 First Cry's revenue is primarily from its India multi-channel segment, which accounts for about 70% of its total revenue, with international sales contributing 11.63%.
• 🔑 Global Bees Brand, a part of First Cry, covers key categories like home utilities, fashion, lifestyle, appliances, and beauty and personal care, contributing 18.66% to the company's revenue.
• ⚠️ Key risks for First Cry include material uncertainties for certain subsidiaries regarding their ability to continue as a going concern and the company's history of incurring losses which may continue in the future.

Q & A

What is the main topic of the video?

The main topic of the video is an IPO summary of Brainbees Solutions Limited, which operates under the brand name First Cry, India's largest multi-channel retailing platform for mothers, babies, and kids products.

What is the significance of the term 'multi-channel retailing platform' in the context of First Cry?

The term 'multi-channel retailing platform' refers to the various ways First Cry sells its products, including online, through company-owned stores, franchise-owned stores, and general trade retail.

What types of products does First Cry offer to its customers?

First Cry offers a wide range of products for mothers, babies, and kids, including baby clothes, toys, strollers, car seats, maternity wear, and many more.

Why is child care considered a non-discretionary essential expense?

Child care is considered a non-discretionary essential expense because it is a necessary expenditure for parents to meet the basic needs of their children, which is a continuous requirement due to the rapid growth and changing needs of children.

How does the demographic of India contribute to the potential growth of the child care industry?

India's demographic, being among the youngest nations in the world with a median age of approximately 28 years as of 2023 and a large population of children under the age of 12, contributes to the potential growth of the child care industry as it indicates a large target audience for such products and services.

What is the estimated growth rate of the overall market for child care products in India?

The overall market for child care products in India is estimated to grow at a CAGR of 12 to 14%, with an expected growth rate of 13 to 15% between the years 2024 to 2029.

How does the spending of Indian parents on their children compare to parents in other countries?

On average, an Indian couple spends around 9,000 to 9,300 per child per year, which is significantly less compared to parents in countries like China (around 45,000), Saudi Arabia (around 61,000), and the UAE, UK, and US (around 2,10,000), indicating a large headroom for growth in India.

What are the main business segments for First Cry's revenue?

First Cry's main business segments for revenue include India multi-channel, which accounts for almost 70% of their revenue, international markets contributing 11.63%, and Global Bees Brand accounting for 18.66% of their revenue.

What is the meaning of 'going concern' in the context of a company's financial health?

A 'going concern' refers to the ability of a company to continue operating for the foreseeable future, typically at least one year. If a company's auditors express doubts about its ability to continue as a going concern, it indicates potential financial instability.

What are some of the key risks mentioned in the RHP (Red Herring Prospectus) for First Cry?

Some key risks mentioned in the RHP include material uncertainties about certain subsidiaries' ability to continue as a going concern, the company's history of incurring losses which may continue in the future, and pending litigations against the company and its subsidiaries.

What is the purpose of the funds raised through the IPO according to First Cry's RHP?

The funds raised through the IPO will be used for a variety of purposes as detailed in the RHP, including opening new stores, setting up warehouses, lease payments for modern stores, investment in subsidiaries, and funding organic growth.

What is the time frame for the IPO of First Cry as mentioned in the video?

The IPO of First Cry is scheduled to open on the 6th of August and close on the 8th of August.

How does the video suggest evaluating the decision to invest in an IPO?

The video suggests evaluating the decision to invest in an IPO by considering the company's financials, the business model, the risks, the industry, and the overall market condition, which can significantly impact the IPO's reception regardless of the company's merits.

Outlines

00:00

📢 Introduction and Overview of First Cry

CA Rachana introduces the video about Brainbees Solutions Limited, also known as First Cry. She explains the shoot-and-release format and mentions that corrections will be in the pinned comment. For investing in any IPO, viewers need a Demat account, with links provided in the description and pinned comment. First Cry is described as India's largest multi-channel retailing platform for mothers, babies, and kids, selling products online, through company-owned stores, franchises, and general trade retail.

05:03

📈 First Cry's Market and Product Range

First Cry targets mothers, babies, and kids, offering products like baby clothes, toys, strollers, car seats, and maternity wear. The company is termed a non-discretionary essential expense as child care requires regular spending due to the fast growth of children. This creates predictable cash flows from parents. India, with a median age of 28 years in 2023, is one of the youngest nations and has a large population of children under 12, making up 21% of the population. The children's product market is primarily apparel, with significant growth potential estimated at a CAGR of 12-14% from 2024 to 2029.

10:06

🌏 International Market and Revenue Segments

First Cry also earns revenue from international markets like the UAE and KSA. Another significant segment is the Global Bees Brand, covering home utilities, fashion, lifestyle appliances, and beauty and personal care. This brand contributes 18.66% of the revenue. Key risks mentioned in their RHP include the material uncertainties for some subsidiaries to continue as a going concern, and the company's history of incurring losses, which might continue. Pending litigations and revenue growth details are also provided, highlighting the company's financial challenges.

📊 Financial Performance and IPO Details

The company's revenue has shown growth, but it continues to incur losses, with significant numbers in the latest year. The RHP indicates no listed peers for direct comparison. The IPO details include a fresh issue of 1,666 crores out of a total issue of 4,200 crores. The company plans to use the funds for various purposes, including opening new stores and investing in subsidiaries. The overall market condition also impacts the IPO's response, and a separate video explains the market crash. The summary ends with an invitation to like, share, and subscribe.

Keywords

💡IPO

An Initial Public Offering (IPO) is the first sale of stock by a company to the public. It marks the company's entry into the public financial markets. In the context of the video, it discusses the IPO of Brainbees Solutions Limited, which operates the First Cry brand, and provides an overview of the company's financials and business model in relation to the IPO.

💡First Cry

First Cry is India's largest multi-channel retailing platform for mothers, babies, and kids products. The term is central to the video's theme as it is the company going public. The script discusses its business segments, revenue, and growth potential, highlighting its significance in the retail industry.

💡Multi-channel retailing

This concept refers to the use of multiple platforms or channels for selling products or services. In the script, it is used to describe how First Cry sells its products both online and through physical stores, including company-owned, franchise-owned, and general trade retail outlets.

💡Demat account

A Demat account is an account that holds shares of publicly traded companies electronically. The video script mentions that to invest in IPOs, one needs a Demat account, emphasizing its importance for retail investors participating in the stock market.

💡Industry Analysis

Industry analysis is the process of evaluating the performance of an industry and its future prospects. The script uses this term to discuss the potential growth of the children's retail market in India, comparing it with other countries and providing statistics on the youth demographic.

💡Non-discretionary essential expense

This term refers to necessary expenses that are not subject to individual choice, such as food, utilities, and in the context of the video, child care. The script explains that spending on children's products is considered non-discretionary, implying a steady demand for First Cry's offerings.

💡CAGR

Compound Annual Growth Rate (CAGR) is a measure of growth over multiple time periods. The script mentions the CAGR to project the expected growth rate of the children's retail market in India, indicating the industry's potential for expansion.

💡Global Bees Brand

Global Bees is a brand under the First Cry umbrella, covering various categories like home utilities, fashion, lifestyle, appliances, and personal care. The script explains that this brand contributes to First Cry's diversified revenue streams, beyond just children's products.

💡Going concern

A going concern is an assumption in accounting that a business will continue its operations for the foreseeable future. The script discusses material uncertainties regarding some of First Cry's subsidiaries as a key risk, as it relates to their ability to continue operations.

💡Litigations

Litigations refer to legal disputes or cases that a company is involved in. The video script mentions pending litigations against First Cry's subsidiaries, indicating potential legal challenges that could impact the company's financial health and reputation.

💡Adjusted EBITDA

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, and adjusted EBITDA removes other non-operating and non-recurring items. The script uses this financial metric to provide insight into First Cry's operational profitability, excluding certain expenses.

Highlights

Brainbees Solutions Limited, known for its retail platform First Cry, is the subject of an IPO summary video.

First Cry is India's largest multi-channel retailing platform for mothers, babies, and kids products.

The company operates through online sales, company-owned stores, franchises, and general trade retail.

First Cry's target audience is mothers, babies, and kids, offering a wide range of products including baby clothes, toys, strollers, and maternity wear.

Child care is considered a non-discretionary essential expense, making parents perpetual customers for First Cry.

India has a young median age and a large population of children, contributing to the potential growth of the child care industry.

The Indian child care market is expected to grow at a CAGR of 12-15% between 2024 and 2029.

Indian parents spend significantly less on their children annually compared to parents in countries like China, Saudi Arabia, and the US, indicating room for market growth.

First Cry's revenue is primarily derived from its India multi-channel segment, accounting for 70% of total revenue.

International sales and the Global Bees Brand contribute to 11.63% and 18.66% of First Cry's revenue, respectively.

Certain subsidiaries of First Cry have material uncertainties regarding their ability to continue as a going concern.

First Cry has incurred losses in the past and may continue to do so, which could impact the business and equity share value.

The company faces pending litigations, though they are not considered material compared to the overall financials.

First Cry's revenue from operations has shown growth, with a 15% increase in the latest year.

The company has detailed the use of IPO funds extensively, including opening new stores and investing in subsidiaries.

The IPO is scheduled to open on August 6th to 8th, with 1,666 crores as a fresh issue and the balance as an offer for sale.

Investors should consider both the company's financials and the overall market condition before investing in the IPO.

The video provides a detailed summary of First Cry's 600+ page RHP in approximately 10 minutes.

Transcripts

Hey folks CA Rachana here and I welcome you  all to the IPO summary video of Brainbees  

Solutions limited and you you might be like what  which company First Cry you might be knowing this  

company by the name First Cry okay so it's going  to be another shoot and release video and you know  

the drill what is to be done that it's a shoot  and release and that is the reason why just in  

case if I fumble upon some word I'm going to give  the corrections in the pinned comment so don't  

forget to check out the pinned comment after  you listen to the full video and of course if  

you want to invest in any IPO not just I mean  we are not talking about any specific IPO but  

in general if you want to invest in IPOs you need  to have a Demat account and the link for opening a  

Demat account is there in the description box and  in the pinned comment so with this let's get started  

and understand about some basic points about First  Cry first come first what is First Cry India's  

largest multi- channel retailing platform for whom  mothers babies and kids products I'm sure you know  

about this you might have even seen stores of  First Cry and for mothers babies kids you'll get  

a lot of products out there but why do we call it  as a multi- channel retailing platform the reason  

is simple because they sell it online they sell  their products online they sell it through company  

owned stores they sell it through franchises  owned stores and also general trade retail  

okay so quickly one more time who is their target  audience number one mothers babies and kids okay  

then how do they sell it online their own stores through franchises and general stores okay I  

hope till here it is absolutely clear but finally  what do they sell they sell everything like baby  

clothes toys strollers car seats maternity  wear and a lot more okay now we also have to  

understand few more points about the company that  whenever it is about First Cry first things that  

comes to your mind is about child care and child  care is a non discretionary essential expense so  

basically non-discretionary is nothing but  an essential expense and that is a reason why  

parents definitely know that there is a need to  spend on the child for a longer duration because  

you know kids grow so fast that even if you buy a  few clothes maybe within like 6 to 8 months they  

may they may required to buy newer clothes  same goes with footwear as well right their  

taste changes and that is the reason why these  parents become like a perpetual customer for the  

company and that is the reason why they say that  once we establish a connection with the parent  

their cash flows from parents can become a little  bit predictable okay now if I were to understand  

about the industry analysis some again interesting  points out here in the industry analysis India is  

among the youngest nations in the world median age  is approximately 28 years as at 2023 and because  

we are among the youngest nations of course we  have an ability to adapt to newer and newer trends  

right India is also I mean India also has one of  the largest populations of children globally with  

approximately 30.6 CR children under the age of  12 years of age and the this population 0 to 12  

years population accounts for approximately 21%  of India's population as at 2023 now if if you  

were to check this specific graph you will see  that out of the total market the major market is  

of apparel which accounts for almost 68% as at 2024  followed by consumables then hard goods and then  

toys and games okay now also let's understand how  much does the industry have a potential to grow so  

all in all in India the the overall market is  estimated to grow at a CAGR of 12 to 14% and in  

the Years 24 to 29 it is expected to grow at 13 to  15% okay sounds interesting 13 to 15% yes but now  

if I were to compare industry in India with other  with other countries something like USA, UK ,UAE

Kingdom of Saudi Arabia, China of course in that  case how much are Indian parents spending yearly  

for their children now on an average an Indian Indian couple may spend around 9,000 roughly 9,200  

to 9,300 per child per year okay and if I were  to compare this with China it is around 45,000  

Saudi Arabia it is around 61,000 UAE UK and US  is to like is 2,10,000 this is like too much  

high but even if I were to compare ourselves with  China we still have a large headroom left and that  

is the reason why it is a growing industry is what  I can definitely say right now talking about which  

are the business business segments for First Cry  so I hope you are understanding that the previous  

one or two points were about industry now we are  drilling down specifically to First cry so if I  

were to show this table to you it'll be much more  easier for you to understand how do they earn what  

are their key segments for their revenue number  one is their India multi-channel which accounts  

for almost 70% of their revenue now whenever  I'm talking about India multi-channel means  

what they're earning revenue through the points  that are discussed online stores through their  

own brand outlets through franchise owned outlets  so general stores all this will account for what 70.66% 

of their revenue internationally also they  are selling 11.63% of their revenue comes from  

International markets but where are they selling  in areas like in countries like UAE and KSA  

that is nothing but Kingdom of Saudi Arabia  now they also have one more segment if you see  

here Global Bees Brand and this is something  interesting because this brand covers four  

key categories home utilities fashion lifestyle  appliances and beauty and personal care home and  

personal care so whenever I talk about First Cry  if someone would have told you that they also earn  

through sale of appliances you might be like how  is this possible or fashion beauty so that is not  

sold directly under the brand name of First Cry  but it is under the Global Bees Brands okay so  

all in all I hope you have understood the split  this accounts for almost 18.66% of the revenue  

now talking about the key risks we do have one key  risks here again all data that I'm talking about  

is taken directly from their RHP so this is not  a risk that I have discovered myself I'm just  

telling you whatever is been has been given in  their own RHP okay so one of the key risks that  

is mentioned in their RHP is certain subsidiaries  had observed material uncertainties in relation  

to their ability to continue as a going concern in  their audit report and if such subsidiaries  

are unable to continue as a going concern it  may have an adverse financial impact on their  

company and their 107 subsidiaries as as they  have provided financial support letters to  

okay whatever just for you to tell what is what  do we mean by continuing as a going concern see  

going concern is something which is like the  possibility of the company to continue for a  

foreseeable future and what do we mean by a for  foreseeable future at least one year in simple  

words if the auditor feels that this company  will continue for at least next one year then  

it is thumbs up but if the auditor feels that  maybe in the next one year itself the company  

may close down I'm not specifically talking about  this holding company I'm talking about few of the  

subsidiaries of First Cry so if the auditor of  the subsidiaries of First Cry is failed that  

they may not continue for even one year they  have mentioned it the there in their auditor's  

report about the question mark on the ability  of the company to continue as a going concern  

is that one of the key risks absolutely yes the  second key risk that they have mentioned again  

in their RHP is that they have incurred losses  in the past periods they may continue to do so  

in the future and that may adversely impact  their business and the value of equity shares  

so we can see the losses have been increasing  from 78.6 crores to 486 crores slightly on the  

downward trend to 321.5 crores still is that  a big number yes okay there are some pending  

litigations also totality me against the  subsidiaries is around 195.21 Millions by  

the subsidiaries is not that material against the  compan is 59 million but generally what we do is  

we compare this number with the profits  to understand how material this number  

is but unfortunately the company is in losses so  I just can't compare this with profits even if I  

were to compare it with revenue then in that case  this number seems to be a little bit on a smaller  

side okay but how much is their revenue revenue  from operations if you see that has gone up from  

24,012 million 256,000 I'm rounding it off  264,000 so a decent enough growth growth if is  

year growth percentage in the latest Year from 23  to 24 has been at 15% but if I were to talk about  

loss for the year I did discuss about this from 78  crores losses to 321.50 crores of losses adusted  

Ebitda and Ebitda margins are also mentioned here  if I were to talk about the peers the RHP says we  

have no listed peers so direct comparison is not  possible now if I want to talk about the objects  

of the issue generally what other companies  do is that they will say uh we are going to use  

this money for let us say capital expenditure or  we are going to use this money for repayment of  

loans okay or for general corporate purpose but  here they have written as good as an essay where  

they have mentioned about what are they going to  do with this money in absolute detail so what you  

can do maybe just pause take a screenshot have  a look at it so it could be right ranging from  

opening up new stores to setting up a warehouse  to lease payments for their identified identified  

modern stores to what it still continues right  till investment in subsidiaries also funding  

in organic growth so this is huge I mean a lot of  objects of the issues is what they have mentioned  

in their RHP what about the IPO details it's it  opens on the 6th of August to 8th of August you  

can read this nothing to be you know specifically  told here or taught here again you can just pause  

and understand of course one important point here  is that out of the total issue of almost 4,200  

crores 1,666 crores is fresh issue and balance  is offer for sale all in all whenever you are  

deciding whether to apply for any specific IPO or  not there are two things to be considered number  

one about the financials of the company do you  feel they are interesting or not what do you feel  

about the business model of the company what are  the risks industry so many things to be understood  

but number two what you have to understand is  how is the overall market position as well if you  

understand right now the markets are not that in  a great mood so it could happen that irrespective  

of how the IPO is if the overall condition of  the market is not that great the IPO may not  

get a very great response so here I'm not talking  about how the company is I'm talking about how the  

market is right now which is definitely not  in its greatest of health so just in case if you  

don't know what has gone wrong with the market  I've done a separate live stream explaining an  

absolute detail as to why the markets have crashed  if you want to check out that video the live  

stream you can check it I've given the link in  the description box and in the pinned comment please  

tell me how did you like this short summary  roughly around 10 minute summary of a 600 plus  

a 680 plus pager RHP if you did like it please  consider smashing the like button share this  

video with your friends and I'll see you in  the next one till then take care JAI HIND and bye-bye