According to three people with firsthand knowledge of the matter, Indian retailer FirstCry plans to withdraw its application for a $500 million initial public offering (IPO) as early as next week, following concerns expressed by the country’s markets regulator about important metrics the company gave to investors.
With support from SoftBank, TPG, and Mahindra & Mahindra of India, FirstCry is a baby product company that aims to capture the market for new parents in the most populous country in the world by selling items like clothes, diapers, and toys.
The three individuals claimed that in recent weeks, SEBI informed the company that it had failed to adhere to Indian requirements requiring an IPO-bound company to disclose all significant business indicators that it has provided with potential investors in its papers during the previous three years.
Following widespread criticism of the apparent lack of governance over huge loss-making companies that have commanded high valuations, SEBI established this rule in 2022, intensifying inspection of companies wanting to list.
According to the sources, FirstCry will now withdraw its IPO papers, make revisions, and refile them in the upcoming months. This would cause its investors—some of whom have invested for as long as ten years—to postpone selling their shares.
