A Look Into The Shareholding Pattern Of IPO-Bound Snapdeal

Ecommerce major Snapdeal has joined the list of startups waiting to go public in 2022. It has filed its draft red herring prospectus (DRHP) for a fresh issue of shares worth INR 1,250 Cr and an offer for sale (OFS) of 3.07 Cr shares by existing investors.

Under the OFS, Masayoshi Sons’ SoftBank, the largest shareholder in Snapdeal will offload the highest number of shares. SoftBank’s Starfish I Pte Ltd will offload up to 2.4 Cr shares. SoftBank holds 35.41% stake in the company, through Starfish I Pte Ltd.

B2 Professional Services LLP is the second largest shareholder with 12.78% stake in Snapdeal. The directors of the company are Yashna Bahl (wife of Snapdeal CEO Kunal Bahl) and Parul Bansal (wife of COO Rohit Bansal).

Kunal Bahl, the cofounder and CEO directly owns a 4.56% stake and Rohit Kumar Bansal, cofounder and COO holds 2.94%. The founders, however, are not offloading their stakes.

The second biggest shareholder in the homegrown ecommerce major is US-based Nexus Ventures Partners with 10.55% stake through Nexus India Direct Investment II (9.47% shares) and Nexus Opportunity Fund Limited (1.08%).

Ecommerce major eBay and Taiwanese manufacturing giant Foxconn are also among the major shareholders in Snapdeal. eBay Singapore Services Pvt Ltd owns 5.68% stake in Snapdeal while Wonderful Stars Pte Ltd, a subsidiary of Foxconn incorporated in Singapore holds 4.38% stake.

Singapore government-owned Temasek has a 2.88% stake in it through its wholly-owned subsidiary Dunearn Investments (Mauritius) Pte Ltd.

The other investors with more than 1% stake in Snapdeal are Ontario Teachers’ Pension Plan Board (2.01% shareholding), Intel Capital Corporation (1.31%), Premji Invest (via PI Opportunities Fund – I, 1.18% stake), Kenneth Stuart Glass (1.11%), QRG Investments and Holding Limited (1.08%).

The rest of the 14.03% stake is owned by investors with less than 1% stake. Other marquee investors in the ecommerce startup include BlackRock and Ratan Tata promoted RNT Associates.

Snapdeal has till date received over $1.5 Bn.

In its DRHP, Snapdeal said that it is a professionally managed entity and does not have an identifiable promoter in terms of SEBI norms and Companies Act and so, there is no requirement of minimum promoter’s contribution in this offer.

Snapdeal may also consider a private placement of shares worth up to INR 250 Cr, prior to filing of the Red Herring Prospectus (RHP) with the registrar of companies (RoC), which shall not exceed 20% of the fresh issue portion, said the DRHP.

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. 

Offer For Sale

It includes an offer for sale by existing investors of up to 30,769,600 equity shares.

Apart from Starfish I Pte Ltd, Wonderful Stars Pte Ltd and Sequoia Capital India III Ltd have offered to sell 29.68 Lakh and 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 (504,000).

Snapdeal’s Financials

In FY21, the Delhi-based ecommerce startup reduced its loss by 54% in FY21. Snapdeal witnessed a total loss after tax worth INR 125.4 Cr for the year ended March 31, 2021. In FY20, it posted a loss of INR 273.5 Cr.

Its total income during the fiscal was INR 510.2 Cr, 44.3% down from INR 916.6 Cr it posted in FY20.

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.

Snapdeal was founded by Kunal Bahl and Rohit Bansal in 2010.It  used to be a strong competitor with the likes of ecommerce giants Flipkart and Amazon in India.

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