New Delhi: Snapdeal Ltd., the Indian e-commerce startup backed by SoftBank Group Corp, filed preliminary documents for an initial public offering, adding to the multitude of tech companies making their debuts on the country’s exchanges amid a record-breaking stock market rally.
The New Delhi-headquartered company plans to raise 12.5 billion rupees ($165 million) through the sale of new shares, according to its draft red herring prospectus, or DRHP, filed with the Securities and Exchange Board of India. In addition, existing shareholders including SoftBank are planning to sell 30.77 million secondary shares.
Snapdeal was founded in 2010, which once competed with Amazon. and Walmart’s Flipkart in India’s growing market, but fell behind as its deep-pocketed competitors invested heavily to gain market share. Revenue from operations fell 44% to Rs 4.7 billion for the year ended March 2021, though its loss fell by more than half to Rs 1.25 billion.
Snapdeal has reinvented itself to stand out from its larger competitors and focus on value-driven e-commerce. The company, whose other backers include eBay Inc. and Sequoia, reported operating revenue of about Rs 2.4 billion in the six months to September 30.
Snapdeal’s IPO, which is targeted early next year, comes after a record year for its Indian market debut. Food-delivery pioneer Zomato Ltd started the market rush, followed by FSN E-Commerce Ventures Ltd. Successfully offered by the likes of hero beauty business. One97 Communications Ltd., which runs digital payments giant Paytm, pulled out the largest IPO in the country’s history for $2.4 billion, but its shares fell quickly.
On Tuesday, MapmyIndia, a digital mapping company working with Apple Inc and Amazon, soared more than 50% on its first day of trading.
established by Kunal Bahli and childhood friend Rohit Bansal, Snapdeal started as a deals website before expanding into online retail. In 2017, as the company struggled, masayoshi sonoK SoftBank, one of its biggest backers, prompted the founders to merge with the staunch Flipkart. Bahl and Bansal ultimately decided not to go ahead with the deal, requiring them to focus on reducing their cash burn.
The decade-old startup backed by BlackRock Inc., Temasek Holdings Pte. and eBay Inc. has since shifted its business model to focus on India – the non-English speaking, non-affluent, non-urban and non-tech savvy bulk of India’s population. Amazon and Flipkart cater to big-city shoppers, selling big-ticket items like premium smartphones and high-priced electronics.
Snapdeal sells table mats, tummy trimmers, beard grooming oils, and fleece blankets, all for under $5. Of the 60 million items listed by it, more than nine-tenths are priced under Rs 1,000.
According to a release issued by the company in early November, during the latest festive season, Snapdeal’s sales volume grew by 254% in the fashion category, 101% in the kitchen category and 93% in the beauty category.
Axis Capital Limited, BofA Securities India Limited, CLSA India Private and JM Financial Limited are the book runners for the IPO.
The New Delhi-headquartered company plans to raise 12.5 billion rupees ($165 million) through the sale of new shares, according to its draft red herring prospectus, or DRHP, filed with the Securities and Exchange Board of India. In addition, existing shareholders including SoftBank are planning to sell 30.77 million secondary shares.
Snapdeal was founded in 2010, which once competed with Amazon. and Walmart’s Flipkart in India’s growing market, but fell behind as its deep-pocketed competitors invested heavily to gain market share. Revenue from operations fell 44% to Rs 4.7 billion for the year ended March 2021, though its loss fell by more than half to Rs 1.25 billion.
Snapdeal has reinvented itself to stand out from its larger competitors and focus on value-driven e-commerce. The company, whose other backers include eBay Inc. and Sequoia, reported operating revenue of about Rs 2.4 billion in the six months to September 30.
Snapdeal’s IPO, which is targeted early next year, comes after a record year for its Indian market debut. Food-delivery pioneer Zomato Ltd started the market rush, followed by FSN E-Commerce Ventures Ltd. Successfully offered by the likes of hero beauty business. One97 Communications Ltd., which runs digital payments giant Paytm, pulled out the largest IPO in the country’s history for $2.4 billion, but its shares fell quickly.
On Tuesday, MapmyIndia, a digital mapping company working with Apple Inc and Amazon, soared more than 50% on its first day of trading.
established by Kunal Bahli and childhood friend Rohit Bansal, Snapdeal started as a deals website before expanding into online retail. In 2017, as the company struggled, masayoshi sonoK SoftBank, one of its biggest backers, prompted the founders to merge with the staunch Flipkart. Bahl and Bansal ultimately decided not to go ahead with the deal, requiring them to focus on reducing their cash burn.
The decade-old startup backed by BlackRock Inc., Temasek Holdings Pte. and eBay Inc. has since shifted its business model to focus on India – the non-English speaking, non-affluent, non-urban and non-tech savvy bulk of India’s population. Amazon and Flipkart cater to big-city shoppers, selling big-ticket items like premium smartphones and high-priced electronics.
Snapdeal sells table mats, tummy trimmers, beard grooming oils, and fleece blankets, all for under $5. Of the 60 million items listed by it, more than nine-tenths are priced under Rs 1,000.
According to a release issued by the company in early November, during the latest festive season, Snapdeal’s sales volume grew by 254% in the fashion category, 101% in the kitchen category and 93% in the beauty category.
Axis Capital Limited, BofA Securities India Limited, CLSA India Private and JM Financial Limited are the book runners for the IPO.
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