The shares of Brainbees Solutions, the operator of online platform FirstCry, made its stock market debut at 40% premium as against its initial price of ₹465. The stock opened at ₹651 on the NSE and ₹625 on the BSE on Tuesday, August 13.

The listing was well above Street expectations. Ahead of its debut, shares of Brainbees Solutions were trading with a grey market premium (GMP) of ₹87.

While Firstcry’s market leadership and strong brand position are undeniable, investors should remain cautious about the company’s path to profitability, said Shivani Nyati of Swastika Investmart.

The reliance on third-party manufacturers and negative cash flows remain areas of concern that require close monitoring.

StoxBox Research Analyst Akriti Mehrotra has also sounded a note of caution to investors despite the anticipated listing premium. “The market may reflect initial enthusiasm but does not fully account for the company’s ongoing financial difficulties and rising debt.”

The IPO had received a muted response from the investors. The issue was subscribed 12.22 times at close, thanks to the push from qualified institutional bidders (QIBs), whose quota was booked 19.30 times.

The IPO of Brainbees Solutions, which was open for bidding between August 6 and August 8, had a price band of ₹440-465 per share.

The company garnered ₹4,194 crore from its IPO, which included a fresh share sale of ₹1,666 crore and an offer-for-sale (OFS) up to 5.44 crore shares.

FirstCry CEO Supam Maheshwari said the company has a $120 billion total addressable market. He also said that FirstCry has over 1,000 stores across 533 cities.

Brainbees Solutions Ltd. is the largest fashion first omni-channel retail platform for baby and kids’ products in India, UAE and Saudi Arabia.

The company offers a wide range of products, including clothing, toys, diapers, baby gear, and more, catering to the diverse needs of infants, toddlers, and young children.

In FY24, the company posted 15% growth in operating revenue at ₹6,481 crore, while it reduced losses by 34% to ₹321 crore during the same period.

Over the last three financial years, its revenue from operations has grown to 6,481 crore for FY24 from ₹2,401 crore in FY22. The company said it is the largest multi-channel retailing platform for mothers’, babies’ and kids’ products, in terms of GMV, for FY24.