Indian e-commerce platform Snapdeal has filed its draft red herring prospectus (DRHP) with markets regulator SEBI for an initial public offer (IPO). The IPO consists of a fresh issue of equity shares worth up to Rs 1,250 crore and an offer-for-sale (OFS) of up to 30.77 million equity shares by existing shareholders, as per DRHP.
Existing shareholders including SoftBank, Foxconn, Myriad Opportunities, Madison India, Sequoia Capital, Ontario Teacher’s Pension Plan Board (OTPPB), Kenneth Stuart Glass and Laurent Amouyal would be participating in the OFS, offloading a portion of their respective holdings.
SoftBank will be the largest beneficiary of the OFS, selling 140.7 million shares followed by Foxconn and OTPPB who will be selling 17.4 million and 7.98 million equity shares respectively in the OFS transaction. Importantly, both co-founders Kunal Bahl and Rohit Bansal would not be participating in the OFS round and Snapdeal is looking to list as a professionally managed company.
Snapdeal will be considering raising an additional Rs 250 crore in a pre -IPO round via private placement which will eventually reduce the size of the IPO. The company’s profitable subsidiary Unicommerce had recently raised capital from Softbank in a private placement round, with the latter picking up nearly 30% stake in the subsidiary. Entrackr was first to report this transaction on December 16.
Of the total fresh issue size of Rs 1,250 crore, the company will utilise Rs 900 crore towards funding the company’s growth initiatives including increased spending on business promotion, customer acquisition and retention and scaling up its brand awareness and visibility campaigns. The rest will be used for expanding its logistics capabilities and enhancing the company’s technology infrastructure.
Snapdeal has appointed Axis Capital, BofA Securities, CLSA Limited and JM Financial as the book lead running managers for this IPO.
Snapdeal was among the earliest e-commerce forms to hit unicorn status and achieved a peak valuation of $6.5 billion before it hit tumultuous times from 2016 onwards, a period during which key investor Softbank even tried to sell it to Flipkart. For Softbank, and other key investors, their patience will finally be rewarded, if the IPO goes through successfully.
