Snapdeal Postpones IPO Plan Indefinitely, Withdraws DRHP

The company had filed its DRHP in December 2021, placing 3 crore shares for an offer for sale.

Snapdeal Postpones IPO Plan Indefinitely, Withdraws DRHP
In 2017, Snapdeal had called off a potential merger deal with Flipkart to focus on being "financially self-sustainable." Nevertheless, strong competition has seen its fortunes decline.

SNAPDEAL, the e-commerce major, has postponed its plan for an Initial Public Offering (IPO) through which it was planning to issue fresh equity shares worth Rs 1,250 crore amid weak market conditions.

The company had earlier announced placing over 3 crore shares for an offer for sale under its IPO plan.

Currently, the company has not decided on any fresh timeline for the IPO.

According to PTI, a Snapdeal spokesperson said, "Considering the prevailing market conditions, the company has decided to withdraw the DRHP. The company may reconsider an IPO in the future, depending on its need for growth capital and market conditions".

A draft red herring prospectus (DRHP), also known as the offer document, is prepared by merchant bankers as a preliminary registration document for companies looking to float an IPO for book-building issues. Jasper Infotech Private Limited, as the company is registered, had filed the DRHP in December 2021.

At the time of filing the draft paper with the Securities and Exchange Board of India (SEBI), market sources had indicated that the company is looking at a valuation between $1.5 billion and $1.7 billion. As of September 30, 2021, the company had a total equity worth Rs 312.97 crore.

Under the offer, 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 were selling their shares.

However, Snapdeal's founders Kunal Bahl and Rohit Bansal were not selling their holdings in the IPO.

Once a leading player in the Indian e-commerce space, Snapdeal has seen its fortunes falling amid strong competition from rivals Amazon and Flipkart.

In 2017, Snapdeal walked away from a potential merger deal with Flipkart and instead pursued what it called the 'Snapdeal 2.0' strategy to become "financially self-sustainable".

Snapdeal focuses exclusively on the value segment, with more than 90 per cent of the products sold on the platform priced below Rs 1,000 and more than 80 per cent of its users residing beyond the metro cities.

Snapdeal has announced its plans to expand into omnichannel distribution through partner-driven offline stores.

(With inputs from PTI)

This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy.