The code for what you want to do can be much simpler. And I would get rid of the red for sure. If you want just a larger first letter, here is a simple CSS code to do that. I've only named it "dropcap," so I can find it easily in my template file when fixing tons of dropcaps in books that need fixing.
.dropcap {
display: inline;
font-weight: bold;
font-size: 2em;
line-height: 0;
}
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