FirstCry subsidiary Swara Baby Products has received approval from the Securities and Exchange Board of India (SEBI) for its proposed initial public offering of Rs 1,000 crore. The company, which is the largest contract manufacturer of baby diapers in India, had filed its draft papers with the market regulator in July.
Prior to the filing of its red herring prospectus, Swara Baby Products may also consider a pre-IPO placement of Rs 100 crore, which shall be deducted from its fresh issue. Key details pertaining to share price band, lot size and bidding dates are yet to be disclosed.
The book-build issue comprises a fresh component of Rs 500 crore and an offer-for-sale portion of Rs 500 crore. Promoter group Brainbees Solutions will divest equity worth Rs 300 crore, and Anadya Bon Merchari LLP will sell a stake of Rs 200 crore through the OFS route.
JM Financial and Avendus Capital Private are the merchant bankers for the IPO, while MUFG Intime India is acting as its registrar.
Of the total fresh proceeds, the company proposes to deploy Rs 198.2 crore for funding the part-time capital expenditure for its new manufacturing facility at Pithampur, Madhya Pradesh. Then, Rs 100 crore is likely to be utilised for fulfilling the company’s debt obligations.
Swara Baby Products plans to deploy Rs 27.5 crore for repayment and prepayment of borrowings availed by its wholly-owned subsidiaries, namely, Solis Hygiene, Swara Hygiene and KAEHPL. The remaining fresh capital is expected to be utilised for funding the company’s growth initiatives and general corporate purposes.
The IPO is vulnerable to several risks, including regional concentration in the state of Madhya Pradesh, dependency on a limited number of clients for revenue generation, and reliance on a limited number of suppliers. High competition from international and domestic clients should also be monitored.
For FY26, the company’s consolidated profit was reported at Rs 95.5 crore, rising over 18% year-on-year against Rs 80.6 crore reported during the same fiscal year the previous year. Its consolidated revenue from operations was pegged at Rs 1,164 crore, advancing 23% YoY from Rs 943 crore reported in FY25.