SUMMARY
Under the OFS, SoftBank’s Starfish I Pte Ltd will offload up to 2.4 Cr shares
Cofounders Kunal Bahl and Rohit Bansal would not take part in the OFS
The startup proposes to utilise INR 900 Cr out of the fresh issue of INR 1,250 Cr for funding its organic growth
New Delhi-based ecommerce startup Snapdeal has filed its draft red herring prospectus (DRHP) to issue fresh shares worth INR 1,250 Cr.
According to the draft red herring prospectus (DRHP), the offer will also include an offer for sale by existing investors of up to 30,769,600 equity shares.
Under the OFS, SoftBank’s Starfish I Pte Ltd will offload up to 2.4 Cr shares. Wonderful Stars Pte Ltd and Sequoia Capital India III Ltd have offered to sell INR 29.68 Lakh and INR 4.15 Lakh shares respectively.
Ontario Teachers’ Pension Plan would offload 13.6 lakh shares. The other selling shareholders are Kenneth Stuart Glass (748,000 shares), Myriad Opportunities Master Fund Limited (649,600), Laurent Amouyal (128,000) and Milestone Trusteeship Services Private Limited (504,000).
Blackrock, Temasek, eBay, Intel Capital, Nexus Venture Partners, Tybourne, RNT Associates, Premji Invest, and others will also not sell any of their shares in the IPO.
The offer was approved by the board of directors and the shareholders in their respective meetings of November 28, 2021, and December 5, 2021.
Earlier this month, Inc42 had exclusively reported that the New Delhi-based startup has converted into a public company and plans to go public with a fresh issue of INR 1,250 Cr.
As per reports, Snapdeal is eyeing a $200Mn – $250 Mn IPO at a $1.5 Bn valuation.
Utilisation of Net Proceeds
The startup proposes to utilise INR 900 Cr out of the fresh issue of INR 1,250 Cr, towards funding its organic growth, which will entail expenditure on marketing and promotions, as well as enhancing its technology infrastructure, which are expected to be the key factors in achieving these goals.
Further, the balance of the net proceeds would be deployed towards general corporate purposes, subject to such an amount not exceeding 25% of the gross proceeds.
The general corporate purposes for which Snapdeal proposes to utilise net proceeds include, without limitation, business development initiatives, research and development, acquiring fixed assets, meeting any expense (including capital expenditure requirements) including salaries and wages, rent, administration, insurance, repairs and maintenance, payment of taxes and duties among others.
Major Shareholders
Starfish I Pte Ltd is the largest shareholding with 35.41% stake, followed by B2 Professional Services LLP which owns 12.78% stake.
Nexus India Direct Investment II holds 9 .47% stake, while eBay Singapore Services holds 5.68 % .
Kunal Bahl the cofounder and CEO owns a 5.68% shareholding in Snapdeal and Rohit Kumar Bansal, another cofounder holds 2.94%. The founders, however, are not offloading part of their stakes.
Among the major shareholders is Wonderful Stars Pte Ltd, which holds 4.56% stake.
Snapdeal’s Financials
For the period of April – September 2021, the ecommerce startup reported a consolidated net loss of INR 177.07 Cr. Its revenue from operations during the period was INR 238.58 Cr.
It narrowed its losses in FY21 by 54% to INR 125.44 Cr from INR 273.54 Cr in FY20, showed the draft prospectus.
The operational revenue of Snapdeal during FY21 declined by 44.2% to INR 471.75 Cr from INR 846.39 Cr during the previous fiscal.
The losses narrowed due to the decline in expenses from INR 1,211.02 Cr in FY20 to INR 636.35 Cr in FY21.
Customer Base
The company has said that it has 40.15 Mn monthly active users and a customer base of 50.37 Mn who have shopped since FY19.
Around 42 Mn customers are from outside metro cities and it has 14.82 Mn annual transactive customers.
In Q2 FY22, it had a total net merchandise value of INR 374.07 Cr and delivered 8.59 Mn units during the quarter.
Around 90.30% of its sales are from the lifestyle categories such as fashion, home and beauty & personal care. Further, 95.49% of the sales is below INR 1,000 value price points.
Regarding its reach, the startup claimed to have over 550 Mn monthly page views and over 200 Mn app installations.
Founded by Kunal Bahl and Rohit Bansal in 2010, Snapdeal has to date received over $1.5 Bn from marquee investors such as SoftBank and Foxconn Technology Group, Chinese conglomerate – Alibaba Group, and Canada’s Ontario Teachers’ Pension Plan.
The ecommerce giant claims to have customers across 6,000 towns in the country with over 500K sellers and 200 Mn products on its platform.
Snapdeal competes with the likes of Walmart-backed Flipkart and US-ecommerce giant Amazon, newly-listed Nykaa among others.
