Snapdeal Eyes $250 Mn IPO At $1.5 Bn Valuation; To File DRHP In Dec

Exclusive: Ahead Of IPO Snapdeal Converts To Public Company

SUMMARY

Recently, Snapdeal increased its authorised share capital by 12.8 times from INR 16.08 Cr to INR 206.8 Cr — a move done by IPO-ready companies

The report for the $250 Mn IPO comes months after it was speculated that Snapdeal would move for a $400 Mn IPO at a valuation of $2.5 Bn

The lowered IPO size could be attributed to one of the largest IPO’s — Paytm’s weak debut, instead, it plans on replicating with a smaller fund, the success of the likes of Nykaa and Zomato

With plans to file its draft red herring prospectus (DRHP) in the next few weeks, ecommerce giant Snapdeal now joins the lists of startups such as hospitality unicorn OYO, cab-hailing service Ola and Walmart-owned Flipkart, who plan to go public next year. Snapdeal is reportedly eyeing a $250 Mn IPO with plans to catapult the startup’s valuation to $1.5 Bn.

The Delhi NCR-based ecommerce marketplace has reportedly also appointed Bank of America, Axis Bank and JM Financial for the listing. The move comes months after it was speculated that Snapdeal would move for a $400 Mn IPO at a valuation of $2.5 Bn.

The lowered IPO size could be attributed to Paytm’s weak debut on the public market as it went for India’s largest IPO size after Coal India. Instead, with a smaller fund, the IPO plans to replicate the success of the likes of beauty ecommerce marketplace Nykaa, foodtech giant Zomato, among others.

In September, Inc42 had exclusively reported that Snapdeal was increasing its authorised share capital by 12.8 times from INR 16.08 Cr to INR 206.8 Cr — a common strategy adopted by IPO-ready companies. In October, we also reported that Snapdeal was increasing its ESOP pool by 151% from 1.98 Lakh to 5 Lakh options.

Founded by Kunal Bahl and Rohit Bansal in 2010, Snapdeal has raised over $1.5 Bn from investors such as SoftBank, Foxconn Technology Group, Alibaba Group, and Canada’s Ontario Teachers’ Pension Plan. Anand Piramal had last invested an undisclosed amount in Snapdeal back in 2019, and before that Nexus Ventures Partners had invested INR 113 Cr in the ecommerce platform.

Prior to that, Ontario Teachers’ Pension Plan had invested $200 Mn along with other investors in 2016. Back in 2015, Alibaba Group, SoftBank Group led a $500 Mn funding round. In fact, it is interesting to note that two of these major investors — Alibaba Group and SoftBank — will not reportedly offload any part of their shares.

For a space in the ecommerce market valued at $200 Bn by 2026, Snapdeal competes against the likes of Amazon and Flipkart. It claims to have customers across 6,000 towns, 500K sellers and 200 Mn products on its platform. The company has posted consolidated revenue of INR 916 Cr in FY20. The company’s loss increased to INR 274 Cr in FY20 from INR 186 Cr in FY19.

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