Snapdeal Ltd., an Indian e-commerce startup backed by SoftBank Group Corp., has filed preliminary documents for an initial public offering, joining the rush of tech companies looking to debut on the country’s exchanges in the midst of a record-breaking stock market rally.
According to its proposal red herring prospectus, or DRHP, filed with the Securities and Exchange Board of India, the New Delhi-based company intends to raise 1250 crore ($165 million) through the sale of new shares. Furthermore, existing stockholders, including SoftBank, intend to sell up to 30.77 million secondary shares.
Snapdeal, founded in 2010, once competed in the burgeoning India market with Amazon.com Inc. and Walmart Inc.’s Flipkart, but fell behind as its deep-pocketed competitors invested heavily to gain market share. Revenue from operations tumbled 44 percent to 470 crore in the fiscal year ended March 2021, as the two bigger players eroded its market share. Its loss has been reduced by more than half to 125 crore.
Snapdeal has reinvented itself to differentiate itself from larger competitors and to focus on value-driven e-commerce. The company, whose other investors include eBay Inc. and Sequoia Capital, reported operating revenue of approximately 240 crore in the six months ending Sept. 30. It reported an 82 percent increase in net merchandise value, a measure of sales volume, to 374 crore in the fiscal second quarter of this year compared to the final quarter of last year.
Snapdeal’s IPO, which is scheduled for early next year, follows a record year for India market debuts. Zomato Ltd., the pioneer in food delivery, sparked the rush to market, which was followed by successful offerings from companies such as FSN E-Commerce Ventures Ltd., which operates the Nykaa beauty business. One97 Communications Ltd., which operates digital payments giant Paytm, completed the largest IPO in Indian history, raising $2.4 billion, but its shares fell sharply.
