SoftBank-Backed Snapdeal Set To Roll Out IPO, Files DRHP To Raise Rs 1,250 Crore

Snapdeal, one of India's most talked-about e-commerce companies, plans to raise funds by issuing 30,769,600 equity shares through OFS. Know what the company plans

New Delhi: Softbank-backed Indian e-commerce platform company Snapdeal has completed preparations to bring an intial public offering (IPO). Snapdeal has filed Draft Red Herring Prospectus (DRHP) for an IPO of Rs 1,250 crore.

Know the key highlights of the IPO

The company plans to raise funds by issuing 30,769,600 equity shares through OFS (Offer for Sale). Existing shareholders will issue shares worth more than 3 crore. The company has given this information in the DRHP submitted to the SEBI. 

Founders of Snapdeal — Kunal Bahl and Rohit Bansal — are not selling any of their holdings in the IPO. 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.

It has been informed through DRHP that in this offer for sale, seven stakeholders, including Foxconn, Sequoia Capital, and Ontario Teachers Pension Plan Board, along with SoftBank will sell some of their stake and partially reduce their stake in the company. Overall, 8 per cent of the pre-offer equity share capital will be issued through this IPO.

According to the DRHP, the proceeds of the issue will be used for funding growth initiatives, expanding logistics capabilities, and enhancing the company’s tech infrastructure. As part of its expansion plans, Snapdeal plans to expand into omni-channel distribution through partner-driven offline stores. The offline channels accounted for 92 per cent of all sales in the value lifestyle retail market, as of FY21.

Snapdeal has 71 shareholders, of which SoftBank owns 35.41 per cent of the company. Kunal Bahl and Rohit Bansal jointly hold a 20.28 per cent stake in the firm. Neither of them are selling their shares.

Snapdeal targets middle-income, price-conscious buyers who predominantly live in smaller Indian cities. It receives more than 86 per cent of its orders from outside metro cities.

A stellar response to Zomato's IPO, and a profitable listing in July has prompted a number of internet-led businesses to make a beeline for this route.

Since then a number of internet-led businesses, including Nykaa, Paytm, and PolicyBazaar got listed on the exchanges too. However, Paytm, one of the most awaited IPOs, witnessed lacklustre listing.