Snapdeal Ltd IPO

Last Updated: 14 July 2023 11:49 AM by 5Paisa

Snapdeal Ltd has filed for an IPO worth around Rs.1,250 crore. The issue comprises of a fresh issue worth Rs.1,250 crore and an offer for sale of up to 30,769,600 equity shares. Soft bank plans to offload up to 30.77 million equity shares in the offer for sale. Snapdeal is considering a pre-IPO placement worth Rs.250 crore, which will be deducted from the fresh issue. 
The book running lead managers to the issue are Axis Capital Ltd, BofA Securities India Ltd, CLSA India Pvt Ltd and JM Financial Ltd. 

Objective of the issue:
Rs.900 crore of the net proceeds is to be used to fund organic growth initiatives. The rest of the proceeds are to be used for general corporate purposes.
 

Founded in 2007, Snapdeal was once the rival of companies like Amazon and Walmart owned Flipkart. They were the country’s largest pure play value e-commerce platforms in revenue terms in FY20. They have also been one of the top four online lifestyle shopping destinations in India, in FY21, in terms of total app installations. In 2007 the company was initially founded as a coupon booklet business, which in 2010, transformed into an online deals marketplace. And finally in 2012, Snapdeal transformed into an online e-commerce marketplace. They offer a wide variety of products, namely; fashion, home and general merchandise, beauty and personal care and others.  

As on 31 August, 2021, they have 40.15 million monthly active users with 50.37 million customers who have shopped with them since 2019. 77.01% of their business have been from repeat customers, in the same time period and they have a 4.5 rating on Google Play Store. As of 30 September, 2021, Snapdeal has 635 employees. The company has been focusing on supplying the demand arising in Tier 2 cities of India, which will help in the market penetration in that segment. 

The company mainly derives its revenues from marketing fees and freight and collection fees that it collects from its sellers. In 2021, they also introduced the cash on delivery feature. Snapdeal’s subsidiary- Unicommerce eSolutions Pvt Ltd provides Software as Service solutions that help in the operation of e-commerce for traditional brands, D2C brands, retailers etc. 

Snapdeal recently launched an initiative called “Power Brands”  which will help create a network of suppliers that offer good quality products at affordable prices and 13 “Power Brands” have been created since the launch.