Snapdeal Drops $152 Mn IPO Plan Citing ‘Prevailing Market Conditions’

Ecommerce giant Snapdeal has joined the long list of Indian startups which have decided to shelve their initial public offering (IPO) plans this year. The startup has decided to withdraw its $152 Mn IPO as the prevailing negative market sentiment continues to weigh on new-age tech stocks.

Snapdeal filed a request this week with the Securities and Exchange Board of India (SEBI) to withdraw its draft red herring prospectus (DRHP), news agency Reuters reported. The company cited the prevailing market conditions and certain other strategic decisions as the reason to the market regulator for the change in its IPO plans.

It has decided to withdraw the IPO prospectus “considering the prevailing market conditions”, the company said. However, Snapdeal added that it may reconsider an IPO in future depending on its need for capital and market conditions. The New-Delhi based ecommerce platform filed its DRHP with SEBI last year.

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.

Businessman Anand Piramal had last invested an undisclosed amount in Snapdeal back in 2019. Before that, Nexus Ventures Partners invested INR 113 Cr in the ecommerce platform.

Snapdeal’s total income declined 44.3% to INR 510.2 Cr in FY21 from INR 916.6 Cr in FY20, while its loss stood at INR 125.4 Cr during FY21 as against INR 273.5 Cr in the previous fiscal.

Snapdeal posted a total income of INR 252.8 Cr in the first half of FY22.

The year 2021 was a historic period for the Indian startup ecosystem as it raised record funding and also saw startups like Zomato, Nykaa and Paytm listing on the stock exchanges. However, the ongoing Russia-Ukraine war and the global economic slowdown has hit the startup ecosystem hard in 2022.

Earlier this year, online car marketplace platform Droom also withdrew its INR 3,000 Cr initial public offering (IPO) bid. boAt and PharmEasy are among the other startups which shelved their IPO plans this year.

Snapdeal competes with Amazon and Flipkart in the ecommerce market in India. Besides, many other startups as well as Indian conglomerates, have made their foray into the ecommerce space over the last two years.

The Indian ecommerce market size is estimated to reach a size of $400 Bn by 2030, according to an Inc42 report.

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