Snapdeal has filed its DRHP for an initial public offering (IPO) that comprises 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 and 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.
The selling shareholders include SoftBank, Foxconn, Myriad Opportunities, Madison India, Sequoia Capital, Ontario Teacher’s Pension Plan Board, who are collectively selling less than 8 percent 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, with Rs 900 crore marked for organic growth initiatives.
may also consider private placement of Rs 250 crore before the IPO, as per the filing.
Financials of the company
, which is a value commerce platform, has seen revenue fall sharply in FY21 to Rs 471 crore, nearly 45 percent down from the previous year.
The total income fell to Rs 510 crore, down 44 percent YoY.
The company was also able to pare losses in FY21, which were down 54 percent to Rs 125 core. In H1 of FY22, or for the period ending September 2021, the company saw revenue of Rs 238 crore and loss of Rs 177 crore.
The company has also seen a strong recovery in sales in FY22 , with the number of delivered units growing to 8.59 million in the September quarter, up 40 percent year on year. The net merchandise value has also grown to Rs 374 crore in Q2 of the current fiscal, up compared to Rs 311 crore in the same period last year.
Snapdeal's DRHP lists the draft ecommerce rules proposed by the Consumer Affairs Department, which looks to restrict 'flash sales' and impost a fallback liability on ecommerce entities, among the external risks for the company, citing an increase in costs and adverse effect on operations.
The company has also cited the Social Security Code, which aims to give benefits to gig workers and would require e-comemrce platforms to partially fund the schemes, stating that it could increase labour costs and affect business and financial performance.