India’s decade-old start-up firm, Snapdeal, has filed the preliminary documents for its IPO or Initial Public Offering. This company is one among many such tech firms keen to make their debut on the bourses with the aim of legitimising as well as raising capital for expansion.
Get more details regarding the same here!
Key Highlights of the Story
- According to the draft red herring prospectus or DRHP, Snapdeal, head-quartered in New Delhi, is looking to raise Rs. 1,250 crores or $165 million through its IPO. It will raise this money through the fresh issuance of shares according to the papers filed with SEBI (Securities and Exchange Board of India).
- Existing shareholders, such as SoftBank plan, are planning to sell 30.77 million secondary shares.
Know About Snapdeal
Snapdeal was once a competitor to the likes of Amazon.com and Walmart Inc.’s Flipkart. However, the company failed to capture a potential market share and began to fall behind its competitors.
Revenue from operations dove by 44% in March 2021 and has come down to Rs. 4.7 billion. Losses, however, have narrowed considerably to Rs. 1.25 billion. Companies such as eBay Inc. and Sequoia are other backers of this company.
Kunal Bahl and Rohit Bansal founded Snapdeal in 2010. Back in 2017, Snapdeal was advised to merge with Flipkart. However, the two co-founders were not keen to see the deal through.
Snapdeal has focused its business model to rural and semi-rural India which comprises the bulk of India’s population. Snapdeal sells fleece blankets, tummy trimmers and other items at less than $5. Moreover, it also has nine-tenths of the items listed at below Rs. 1000.
Snapdeal’s initial public offering is set to launch early next year. The year 2021 has been a stellar year for IPOs. Several of them set new records, for example, Zomato, Nykaa, and Paytm. Moreover, on Tuesday, MapmyIndia debuted on the bourse to resounding success. Hence, on this optimistic note, it remains to be seen how Snapdeal’s IPO will perform on the bourse and in terms of subscription.
Frequently Asked Questions
- Who are the book runners for the IPO?
Ans. The book runners for the IPO are:
- JM Financial Ltd.
- CLSA India Pvt. Ltd.
- BofA Securities India Ltd.
- Axis Capital Ltd.
- When was Snapdeal founded?
Ans. Snapdeal was founded on 4 February 2010.
- How much did Snapdeal’s sales volume grow in November 2021?
Ans. Snapdeal’s sales volume grew by 254% in the fashion sector, 93% in the beauty category and 101% in the kitchen category.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.