SoftBank-backed homegrown e-commerce firm Snapdeal has deferred its ₹1,250-crore IPO plans amid a meltdown in tech stocks that have soured investor sentiment. According to a source, the company has withdrawn its documents from SEBI. “In the recent past, no tech-based stock is doing well. Especially companies like Nykaa and Zomato have taken a hit. Hence, the board has decided to defer the plans for now.” When asked about a new timeline, the person said the company has decided to “wait and watch for the next few months”. It has not received the nod from SEBI.
Paytm raised ₹18,300 crore through the IPO in November last year. Its shares have fallen 75 per cent from the IPO price of ₹2,150 to ₹543 now. Food delivery firm Zomato’s shares have halved from their all-time highs after listing in July 2021. Meanwhile, Nykaa, too, is facing slack from its investors.
A Snapdeal spokesperson confirmed saying that “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”.
Snapdeal joins the likes of Boat, PharmEasy and Droom to withdraw DRHPs and postpone IPO plans, at a time when tech stocks are witnessing a significant downfall globally.
Snapdeal filed its DRHP with the Securities and Exchange Board of India (SEBI) last December. The company had earlier announced placing over 3 crore shares for an offer for sale under its IPO plan. It was said its largest shareholder, SoftBank, which owns a 35.67 per cent stake via its affiliate Starfish Pte Ltd, was expected to sell up to 240 lakh shares, while another shareholder, chip-maker Foxconn’s affiliate, Wonderful Stars Pte Ltd, had planned to sell up to 29.7 lakh shares in the company.
However, Snapdeal’s founders Kunal Bahl and Rohit Bansal were not selling their holdings in the IPO. The Delhi-based Snapdeal was started in 2010 by Wharton alumnus Kunal Bahl and Indian Institute of Technology graduate Rohit Bansal.
It had planned to use ₹900 crore of the proceeds of the offering to fund organic growth initiatives, and the remaining for general corporate purposes. Snapdeal’s consolidated operating revenues plummeted by 44 per cent to ₹471.8 crore in FY2021 while its losses less than halved to ₹125.4 crore.
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