Snapdeal files DRHP to raise funds through an initial public offering

SoftBank-backed Snapdeal filed its Draft Red Herring Prospectus for its initial public offer (IPO), comprising a fresh issue of equity shares worth up to Rs 1,250 crore and an offer-for-sale (OFS) of up to 30,769,600 equity shares by existing shareholders.

Snapdeal’s Founders, Kunal Bahl & Rohit Bansal are not selling any of their holding in the IPO. Blackrock, Temasek, eBay, Intel Capital, Nexus Venture Partners, Tybourne, RNT Associates, Premji Invest, and others will also not sell any of their shares in the IPO.

Eight out of total 71 shareholders including SoftBank, Foxconn, Myriad Opportunities, Madison India, Sequoia Capital, Ontario Teacher’s Pension Plan Board, have offered to sell a portion of their respective shareholdings, collectively amounting to less than 8 per cent of the company’s pre-offer equity share capital.

The proceeds of the issue will be used for funding growth initiatives, expanding logistics capabilities, and enhancing the company’s tech infrastructure, Snapdeal said in the DRHP.

Bharat-focused Snapdeal targets value-seeking, middle-income, price-conscious buyers who predominantly live in smaller cities of India. Snapdeal receives more than 86% of its orders from outside metro cities.

More than 95 per cent of the products sold on Snapdeal are priced below Rs 1,000 and more than 77 per cent of Snapdeal’s business comes from repeat customers.

Snapdeal’s asset-light logistics network covers 96.65 per cent of India’s pin codes. It served buyers from more than 2,500 cities during the six months ending September 30, 2021.