BENGALURU: E-commerce company Snapdeal has called off its Rs 1,250 crore IPO plans considering the prevailing market conditions. The SoftBank-backed firm, founded by Kunal Bahl and Rohit Bansal, in December 2021 filed its draft red herring prospectus (DRHP) with market regulator SEBI, but it shelved the plan due to the present tough market conditions.
In a statement to this newspaper, Snapdeal said, “Considering the prevailing market conditions, the company has decided to withdraw the DRHP. The company may reconsider an IPO in the future depending on its need for growth capital and market conditions.”
Snapdeal was looking for an offer for sale from existing investors of up to 3,07,69,600 shares. It competes with big players such as Amazon, Flipkart and Meesho. Its revenue from operations for the period ended September 2021, stood at Rs 238 crore, and its loss was Rs 177 crore. For the six months that ended September 30, 2021, its business promotion expense was Rs 126 crore. Its other expenses decreased by 63.45% to Rs 228 crore in FY2021 compared to Rs 62.5 crore in FY2020.
Start-ups such as Droom, PharmEasy and BoAt too recently shelved their IPO plans. In 2017, Snapdeal struggled to sustain and also called off sale to its rival, Flipkart. The e-commerce firm soon started on the Snapdeal 2.0 journey and focused on its core audience- the value-conscious mega segment. Over 70% of its users are from outside Tier-II towns.