Snapdeal to file listing papers by end-December

The company, founded by Kunal Behl and Rohit Bansal, plans to raise more 2,000 crore through the proposed share sale, the people cited above said on condition of anonymity. This would include a mix of primary fundraising and secondary share sales by existing investors.

The proposed listing, if successful, would mark a comeback for the e-commerce company, which once fought arch rivals Flipkart.com and Amazon.com Inc. to dominate the Indian e-commerce market. competed with.

Snapdeal eventually lost the e-commerce battle to its rivals, and was at one point close to being acquired by Flipkart in a transaction led by its investors. After a brief boardroom fight, founder Bahl managed to save the company from sale.

“The work of preparing the draft prospectus is in full swing. Axis Capital is acting as the lead banker for the IPO. The draft Red Herring Prospectus (DRHP) will be submitted before the end of December, with the aim of hitting the market in the first half of the year 2022, preferably in the first quarter of the calendar year,” said one of the two people above.

The company would seek a valuation of around $1.5-2 billion in share sales, he said, adding that the final value would depend on investor demand.

A major part of the IPO will be primary share sales to raise growth capital for the company.

“It will mostly be a primary issue. Snapdeal is filing for an IPO as a professionally managed company and hence, its largest investor SoftBank will need to sell a small part to bring its stake below 25%. Most other investors, including Temasek, BlackRock and eBay, will not sell in the IPO.”

As per the latest filings available with the Registrar of Companies, SoftBank held 35.67% stake in Snapdeal as on March 31, 2020, while founders Bahl and Bansal held around 19%. Other prominent investors of the company include Albaba, Ratan Tata, BlackRock, Intel Capital and PremjiInvest.

An email sent to Snapdeal remained unanswered till press time.

Snapdeal’s plan to go public on Indian stock exchanges comes on the back of successful listing of a group of technology unicorns such as Zomato, Policybazaar and Nykaa.

Collectively, technology companies have raised 40,000 crore through IPO in 2021.

To be sure, while loss-making technology companies have managed to generate strong demand for their share sales, the steep fall in Paytm’s share price post the record-breaking IPO has attracted investors coming from the technology sector. Can be more cautious on IPO.