According to DRHP, the IPO includes a fresh issue of Rs 1,250 crore and offer for sale of 3.07 crore equity shares.
Snapdeal applies for IPO with SEBI
E-commerce platform Snapdeal has applied to markets regulator SEBI for raising capital through an initial public offering (IPO). According to the draft Red Herring Prospectus (DRHP), the IPO comprises fresh issue of Rs 1,250 crore and offer for sale of 3.07 crore equity shares. The fresh issue capital will be used to finance expansion plans and for general corporate purposes.
Seven stakeholders such as SoftBank, Foxconn, Sequoia Capital and the Ontario Teachers Pension Plan Board will participate in the OFS for partial withdrawals. Axis Capital, BofA Securities India, CLSA India and JM Financial are the Book Running Lead Managers of the issue. Collectively, this constitutes about 8 per cent of the pre-offer equity share capital of the company.
Snapdeal has 71 shareholders. While SoftBank holds 35.41 per cent, founders Kunal Bahl and Rohit Bansal hold 20.28 per cent in the company. Neither of the two founders is reducing their stake. The proceeds from the public issue will be used for development works, expansion of logistics capabilities and augmentation of technology infrastructure of the company.
First Snapdeal partner store to launch in January
Snapdeal focuses on customers from small cities and towns in India. More than 86 per cent of its orders are from outside metro cities. Snapdeal targets middle-income and price-conscious buyers who mainly live in smaller Indian cities. It receives more than 86 per cent of its orders from outside metro cities. Snapdeal’s first partner store will launch in January. The company plans to gradually increase the number to around 25 by the end of 2022.
According to DRHP, Snapdeal’s Net Merchandise Value (NMV) has grown by 82.48 per cent in the last two quarters. It has increased from Rs 205 crore in the fourth quarter of FY 2021 to Rs 374 crore in the second quarter of FY 2022.
portion reserved for retail investors
75% of Snapdeal’s IPO will be reserved for Qualified Institutional Investors (QIBs). While 10 per cent of this will be reserved for retail investors and the remaining 15 per cent for non-institutional investors (NIIs).
Snapdeal has raised funds for the company about 12 times so far. The company also focuses on customers from smaller cities and towns in India. The company has a significant number of customers from Tier 2 cities.
Ahead of the IPO, Snapdeal’s wholly-owned subsidiary Unicommerce has secured investment from SoftBank to acquire around 30 per cent stake.