Snapdeal has filed preliminary documents with the SEBI market regulator to collect funds through an initial public offer (IPO), combining the internal activity championship that wants to list national bags.
Ecommerce platform Snapdeal has submitted preliminary documents to market regulator Sebi to raise funds via an Initial Public Offering (IPO), joining the league of internet companies seeking to go public on national stock exchanges. The public offering includes a new issue of shares valued at 1,250 crore and an offer to sell (OFS) of 3.07 crore of shares, according to the Red Herring Draft Prospectus (DRHP).
According to market sources, the potential listing could value Snapdeal at around $ 1.51.7 billion. Snapdeal founders Kunal Bahl and Rohit Bansal are not selling any of their stakes in the IPO. The sellers of OFS shares are Starfish I Pte, Wonderful Stars, Sequoia Capital, Kenneth Stuart Glass, Myriad Opportunities Master Fund, Ontario Teacher’s Pension Plan Board, Laurent Amouyal and Milestone Trusteeship Services.
Proceeds from the new issue would be used to fund organic growth initiatives, expand logistics capabilities and improve the company’s technological infrastructure. Axis Capital, BofA Securities India, CLSA India and JM Financial are the bookmakers running the show. An exceptional response to Zomato’s IPO and a profitable listing in July has prompted a number of internet-connected companies to take this route. the most anticipated IPOs have seen a lackluster listing.
Snapdeal is an ecommerce company and focuses solely on the value segment, with over 90% of products sold on the platform priced below 1,000 and over 80% of its users residing outside of the metropolitan cities. In the Indian e-commerce space, Snapdeal has seen its fortunes plummet due to stiff competition from rivals Amazon and Flipkart.
In 2017, Snapdeal walked away from a possible merger deal with Flipkart and instead pursued what it called the “Snapdeal 2.0” strategy to become “financially self-sustaining”. The company, backed by Softbank, BlackRock Inc, Temasek Holdings Pte and eBay Inc, has invested in video, vernacular and other strategic projects aimed at growing the online marketplace with new users, especially those arriving from Tier II cities. and beyond.
The company’s powerful brands, UniMove logistics platform, multilingual user support, and its discovery-based purchasing approach that replicates the offline journey of shoppers are just some of the capabilities it has developed under of its strategy focused on Bharath.
As part of its expansion plans, Snapdeal plans to expand into omnichannel distribution through partner-run offline stores. Offline channels accounted for 92% of all sales in the value lifestyle retail market, as of fiscal 2021.