Early investors to gain big in FirstCry, Ola Electric, Unicommerce IPOs

The idiom ‘the early bird gets the worm’ may prove true for investors who took positions in FirstCry, Ola Electric and Unicommerce at the right time, with their investments set to become multibaggers when these new-economy startups go public next week.

Investors such as SoftBank, Tiger Global, Mahindra & Mahindra and Matrix Partners India will see the value of their holdings in these firms surge anywhere between three times to ten times as they hit the public markets, according to calculations made by ET basis information available in the IPO prospectuses of these companies.

For example, at the upper end of the initial public offering (IPO) price band announced by omnichannel baby products retailer FirstCry at Rs 465, SoftBank will clock gains of more than 3x based on its weighted average cost of acquisition per equity share of Rs 154.40 while M&M will see a nearly 6x gain on its cost of acquisition per share.

In the case of electric vehicle maker Ola Electric, early backers Tiger Global and Matrix Partners India are set to clock gains of more than 6x and nearly 10x, respectively.

SoftBank may also clock an over threefold gain from ecommerce enablement software firm Unicommerce, which is valued at Rs 1,100 crore at the upper end of the price band for the IPO.

In the offer for sale (OFS) portion of FirstCry IPO, SoftBank is offloading stake worth Rs 944 crore, and post the offering, will hold shares worth Rs 4,825 crore. This does not account for any potential post-listing gains or losses.

M&M, which first entered FirstCry’s capitalisation table in 2016, is selling stake worth over Rs 130 crore and will still be left with shares worth over Rs 2,349 crore.

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Late entrants

Some of the late investors in FirstCry and Ola Electric, however, will have to bear notional losses for the time being due to the moderate valuations these companies are going public at.

In FirstCry, the upper end of the IPO price band translates to a nearly 5% notional loss for late investors such as cricket legend Sachin Tendulkar, Manipal group’s Ranjan Pai and Sharrp Ventures.

In Ola Electric, Tekne Private Ventures and Alpine Opportunities Fund are looking at a notional loss of 32-33% on their investment cost.

Singapore’s Temasek will see a marginal 1.2% gain at Ola Electric’s upper end of Rs 76 per share while the lower end of the price band is less than the weighted average cost of acquisition per equity share of Rs 75.11.

Also read | Funding cycles come and go; great teams persist: FirstCry’s Supam Maheshwari

Founders counting riches

Supam Maheshwari, founder and chief executive of FirstCry, has already sold shares worth more than Rs 300 crore through secondary transactions prior to the IPO. Post going public, Maheshwari’s stake in the company will be worth over Rs 1,343 crore.

Bhavish Aggarwal, founder and CEO of Ola Electric, meanwhile, will hold a stake worth more than Rs 10,000 crore in India’s largest electric scooter maker.

Aggarwal, who also founded ride-hailing firm Ola Cabs and artificial intelligence startup Krutrim, is offloading stake worth Rs 288 crore through the OFS component of the IPO.

Also read | Ola Electric's IPO receives $2 billion worth of bids from big institutions: report