In the midst of a global sell-off in technology markets, online retailer Snapdeal has cancelled a scheduled initial public offering (IPO).
For the share offering, Snapdeal submitted its draught red herring prospectus (DRHP) to the Securities and Exchange Board of India (Sebi) in December of last year. This came after numerous local internet companies, including Paytm, Zomato, Nykaa, and Nazara Tech, went public with their listings.
“Considering the prevailing market conditions, the company has decided to withdraw the DRHP. It may reconsider an IPO in the future depending on its need for growth capital and market conditions,” a spokesperson for Snapdeal said.
The IPO proposal still required the market regulator’s approval.
The SoftBank-backed company joins other businesses, like BoAt, PharmEasy, and Droom, who have abandoned their IPO preparations.
According to the draught prospectus, Snapdeal planned a primary issue of shares totalling Rs.1,250 crore. Additionally, it intended to use an offer for sale to sell more than 30.76 million shares of stock owned by current investors.
With a 35.67% holding in Snapdeal through its partner Starfish Pte. Ltd., Japan’s SoftBank was scheduled to sell up to 24 million shares, while Foxconn’s affiliate Wonderful Stars Pte. Ltd. in Taiwan intended to sell up to 2.97 million shares. The Ontario Teacher’s Pension Plan Board, Myriad Opportunities Master Fund, and Sequoia Capital were among the other selling shareholders.
Snapdeal intended to spend 900 crores of the IPO proceeds for organic growth efforts, with the remaining money going toward general business needs. The share sale was managed by Axis Capital, JM Financial Ltd., CLSA India, and BoFA Securities India.
Originally founded by Kunal Bahl and Rohit Bansal as a company that printed coupons, Snapdeal then evolved into an online deals platform before becoming an e-commerce marketplace in 2012.
Amazon, Flipkart owned by Walmart, Meesho, and other social commerce platforms are among its rivals.
Operational losses more than halved to 125.4 crores from 274.3 crores in fiscal 2021, while consolidated operating revenue plummeted by 44% to 471.8 crores. It has not yet released its results for FY22.
