Snapdeal weighs IPO to raise $300-400 mn
BENGALURU: E-commerce marketplace Snapdeal is in initial talks with Indian bankers to explore a public listing in India that could see the company raise $300-400 million, four people close to the development said.
The company is expected to arrive at a final decision about the listing in three to four weeks, said two of the four people aware of the discussion.
The company is talking to JM Financial Ltd and another local banker, they said, requesting anonymity. Snapdeal declined to comment on Mint’s queries on the matter.
If the company goes ahead with its listing plans, it is expected to ask for a valuation of more than $2 billion, said one of the four people.
“While the company is in talks with bankers, it is still formulating its plans on the listing. Currently, the float size and valuations are being discussed and the bankers are expected to come back with a formal reply in the coming three to four weeks, post which Snapdeal will make a final decision,” said the first person among the four individuals.
“Most of the groundwork has been done for the company to now turn towards the public market,” the person added.
The news around Snapdeal’s listing comes at a time when Indian unicorns and startups are lining up to list on Indian exchanges. The second half of this year is expected to see unicorns, including beauty marketplace Nykaa, insurtech and lending platform Policybazaar, logistics major Delhivery and Noida-based financial major Paytm, list on Indian exchanges.
Other names include Mobikwik, Traxcn and Mapmyindia, which have filed their initial public offering (IPO) documents over the past two months.
Hospitality unicorn Oyo and cab aggregator Ola are also preparing for public listings by early next year, Mint reported earlier.
Last week, software unicorn Freshworks Inc. filed for its initial public offering worth $100 million with the US Securities and Exchange Commission.
“In their early talks with the company, the bankers are saying that there is a strong story for Snapdeal to tell. While the company has gone through its share of ups and downs, it has made a transition. Further, Snapdeal’s differentiator in the market will be that it is a brand which caters to Bharat and has built a presence in the value e-commerce segment,” said the second person.
The company was also considering listing in the US through a special-purpose acquisition company (SPAC) route towards the end of last year. However, it has abandoned that plan, said one of the people cited above. Bloomberg first reported the IPO development on Friday afternoon.
Snapdeal reported marginal growth in its revenues in fiscal year 2019-20. Its consolidated revenues for FY20 stood at ₹846.4 crore, compared to ₹839.4 crore in the previous year.
While investing in market expansion, it reported a loss of ₹274 crore in FY20 from about ₹186 crore in FY19.
Snapdeal has raised close to $1.77 billion till date from the likes of Softbank Group, Blackrock, Temasek, Foxconn, Alibaba and ebay and was last valued at $1.2 billion, according to Traxcn data.