Indian Economy News

India's sovereign wealth fund may make first digital bet with FirstCry

India's sovereign wealth fund is considering investing in the country's thriving internet economy for the first time. The National Investment and Infrastructure Fund (NIIF) has held talks to invest in SoftBank-backed vertical e-commerce player FirstCry. If the deal goes through, it could perhaps set the stage for NIIF to invest in other tech start-ups in the country.

Some early investors are selling part of their stakes in the Pune-based omni-channel retailer that focuses on baby and mother care products in a secondary deal estimated to be worth US$ 150-US$ 200 million.

The investment will be done at a valuation of just over US$ 2 billion, the same as when TPG, ChrysCapital, and Premji Invest invested US$ 315 million in the company in March.

One of the people briefed on the matter said that the latest negotiations are for about a US$ 150 million but it might get extended up to US$200 million.

 

According to a source familiar with the situation, this will bring the current round's overall value to about US$ 450-US$ 500 million. Aside from NIIF, there may be other new investors and the deal might be finalised in the next four to six weeks.

SoftBank is the single largest shareholder in FirstCry with over 40% stake and that will come down once the round closes formally. However, it will remain its single largest shareholder.

A spokesperson for NIIF said that they do not comment on market speculation and information gathered from third-party sources. They manage capital commitments of over US$ 4.5 billion across three funds -- Master Fund, Fund of Funds and Strategic Opportunities Fund. In April, they made first investment in the Indian healthcare sector by putting around US$ 300 million in Manipal Hospitals, a multi-speciality healthcare provider.

In the next 12-18 months, FirstCry is considering an initial public offering (IPO). The company also has a logistics division called Xpresbees, which was founded in 2015. Its platform continues to see steady demand, though usage has dropped due to the second COVID-19 wave.

During its US$ 300 million investment in March, investors like Elevation Capital, Vertex Partners and MegaDelta Capital Advisors sold their entire stakes.

FirstCry, founded in September 2010, had acquired BabyOye from Mahindra Retail worth around US$ 50 million in 2015. Its other investors include Mahindra Group, Valiant Capital, Ratan Tata and Kris Gopalakrishnan.

FirstCry has over 300 stores across 125 cities. It has a user base of more than 4 million and offers more than 200,000 baby and children’s products from 2,000 brands. It competes with Hopscotch and Kids Stop Press in the online segment.

FirstCry has more than 300 stores in 125 cities. It has over 4 million users and provides over 200,000 baby and children's products from over 2,000 brands. In the online market, it competes with Hopscotch and Kids Stop Press.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.