Snapdeal To Shelve Rs 1,250-Crore IPO Amid Tech Stocks Meltdown, Withdraws DRHP

Snapdeal had earlier announced placing over 3 crore shares for an offer for sale under its IPO plan. The company has not decided on any fresh timeline for the IPO

Snapdeal focuses exclusively on the value segment, with more than 90 per cent of the products sold on the platform priced below Rs 1,000 and more than 80 per cent of its users residing beyond the metro cities.

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SoftBank-backed Indian e-commerce player Snapdeal has deferred its plan for initial public offering (IPO) through which it was planning to issue fresh equity shares worth Rs 1,250 crore ($152 million) amid weak market conditions, the company has said.

Snapdeal had earlier announced placing over 3 crore shares for an offer for sale under its IPO plan. The company has not decided on any fresh timeline for the IPO.

When contacted, a Snapdeal spokesperson said, "Considering the prevailing market conditions, the company has decided to withdraw the DRHP. The company may reconsider an IPO in the future, depending on its need for growth capital and market conditions."

At the time of filing the draft paper with the Securities and Exchange Board of India (Sebi), market sources had indicated the company is looking at a valuation of over $1.5 billion to $1.7 billion.

Under the offer, Starfish I Pte, Wonderful Stars, Sequoia Capital, Kenneth Stuart Glass, Myriad Opportunities Master Fund, Ontario Teacher's Pension Plan Board, Laurent Amouyal and Milestone Trusteeship Services were selling their shares. However, Snapdeal's founders Kunal Bahl and Rohit Bansal were not selling their holdings in the IPO.

Once a leading player in the Indian e-commerce space, Snapdeal has seen its fortunes falling amid strong competition from rivals like Amazon and Flipkart.

Snapdeal had wanted to fund organic growth initiatives with the proceeds of its IPO, which was set to include a fresh issue of shares worth Rs 1,250 crore and an offer for sale of over 3 crore shares.

Investors SoftBank, Sequoia Capital, and Ontario Teachers' Pension Plan Board had offered to sell a part of their stakes in the IPO.

In 2017, Snapdeal walked away from a potential merger deal with Flipkart and instead pursued what it called the 'Snapdeal 2.0' strategy to become "financially self-sustainable".

Snapdeal focuses exclusively on the value segment, with more than 90 per cent of the products sold on the platform priced below Rs 1,000 and more than 80 per cent of its users residing beyond the metro cities. The e-commerce firm has announced its plans to expand into omni-channel distribution through partner-driven offline stores.