Online retailer Snapdeal has abandoned a planned initial public offering. It’s the latest in a string of companies as tech stocks crash globally.
Snapdeal had submitted a draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (Sebi) last December for the sale of its shares. This followed the listing of several domestic technology companies such as Paytm, Zomato, Nykaa and Nazara Tech.
“Given market conditions, the company has decided to withdraw from DRHP. Depending on the need for growth capital and market conditions, we may reconsider an IPO in the future,” Snapdeal said. a spokesperson said.
Market regulators had not yet approved the IPO plan.
The SoftBank-backed company joins startups such as BoAt, PharmEasy and Droom that have shelved IPO plans.
Snapdeal Aimed To Be First Issuance Of Valuable Equity ¥$125 billion, according to the draft prospectus. He also considered selling more than 30.76 million of his shares to existing investors through a sale offer.
Snapdeal’s largest shareholder, Japan’s SoftBank, holds a 35.67% stake through its affiliate Starfish Pte. Ltd planned to sell up to 24 million shares, while another shareholder, Wonderful Stars Pte Ltd, an affiliate of Taiwanese chip maker Foxconn, planned to sell up to 2.97 million shares. Other selling shareholders include Canada’s Ontario Teachers’ Pension Plan Board, Myriad Opportunities Master Fund and Sequoia Capital.
Plan to use Snapdeal ¥Rs 900 crore of the IPO proceeds will be used to fund organic growth initiatives and the rest will be used for general corporate purposes. Axis Capital, JM Financial Ltd, CLSA India and BoFA Securities India have been hired to manage the share sale.
Founded by Kunal Bahl and Rohit Bansal, Snapdeal started as a coupon booklet business, turned into an online trading platform in 2010, and became an e-commerce marketplace in 2012.
It competes with the likes of Walmart-owned Flipkart, Amazon and social commerce platform Meesho.
Consolidated operating revenue decreased 44%, ¥Rs 471.8 million for FY 2021 ¥125.4 million ¥274.3 million in FY2020. Results for 2020 have not yet been published.
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