InvestorQ : Can you tell me about Snapdeal and its proposed IPO plans?
Aditi Sharma made post

Can you tell me about Snapdeal and its proposed IPO plans?

5 months ago

The IPO is yet to be filed by Snapdeal and it only plans to file the draft red herring prospectus or DRHP in late Dec-21. The IPO is expected to be finalized before the end of the current fiscal year. As per hints coming from the market, the IPO of Snapdeal will comprise of a fresh issue of Rs.2,000 crore and an OFS by early investors.

Snapdeal is backed by Softbank of Japan, which holds 35.67% stake in Snapdeal and will have to reduce this stake to below 25% as per extant rules and that could be one of the agendas of the OFS. Seen as a tough competitor to Amazon and Flipkart at one point of time, Snapdeal had faltered along the way and this could be their second coming.

Apart from Softbank owning 35.67% in Snapdeal, founders (Kunal Bahl and Rohit Bansal) jointly own 19%. Snapdeal is also backed by Temasek, eBay, Blackrock, Alibaba, Intel Capital and the family offices of Ratan Tata and Azim Premji. It has been confirmed that Temasek, Blackrock and eBay will not participate in the OFS.

The DRHP is yet to be filed but market estimates peg the Snapdeal valuations at between $1.50 billion and $2 billion. However, it must be remembered that the recent Paytm response and the listing performance could be a kind of overhang on the Snapdeal IPO. It will eventually boil down to how markets view the valuation metrics.