Ecommerce marketplace Snapdeal has increased its authorised share capital by almost 12.8 times. According to the regulatory filings accessed by Inc42, Snapdeal is increasing its authorised share capital from INR 16.08 Cr to INR 206.08 Cr.
A company ideally increases its authorised share capital when it is planning to raise further capital.
According to recent reports, Snapdeal is considering an IPO next year for raising $400 Mn at a valuation of $2.5 Bn. Delhi NCR-based ecommerce startup has reportedly appointed Bank of America, Axis Bank and JM Financial for the listing.
The startup has also appointed Kaushik Dutta (Director, Thought Arbitrage Research Institute) as an independent director as per the SEBI listing regulations, the filings with the ministry of corporate affairs reveal.
Founded by Kunal Bahl and Rohit Bansal in 2010, Snapdeal has to date received over $1.5 Bn from investors such as Masayoshi Son-led SoftBank, Foxconn Technology Group, Chinese conglomerate – Alibaba Group, and Canada’s Ontario Teachers’ Pension Plan.
The company claims to have 500K registered sellers and 200 Mn products for customers across 6,000 towns and cities in India.
Snapdeal reported consolidated revenue of INR 916 Cr in FY20, a 1% drop from FY19. The startup’s loss surged by 47% from INR 186 Cr in FY 19 to INR 274 Cr in FY 20. Its earnings through operations plummeted marginally from INR 899.2 Cr in FY 19 to INR 882.9 Cr in FY20.
Snapdeal competes with Walmart-owned Flipkart and the US-based ecommerce giant Amazon amongst others. In 2017, Snapdeal was in talks with Flipkart for a merger, however, the deal fell through after the company’s shareholders had expressed reservations. Snapdeal later went on to launch Snapdeal 2.0.
Interestingly, the news comes just a couple of weeks after Flipkart raised $3.6 Bn from Walmart, Singapore-based GIC, Canada Pension Plan Investment Board (CPPIB), SoftBank Vision Fund II at a post-money valuation of $37.6 Bn.
According to Inc42 Plus, India’s ecommerce market is expected to cross over $200 Bn by 2026.
Snapdeal now will join the bandwagon of Indian tech startups such as OYO, OLA, BYJU’s, Swiggy, and Pine Labs which are likely to be listed in the next year.