E-commerce site Snapdeal has withdrawn its plan to go public via a Rs 1,250-crore initial public offering, citing market conditions.
“Considering the prevailing market conditions, the company has decided to withdraw the draft red herring prospectus. The company may reconsider an IPO in the future depending on its need for growth capital and market conditions,” a Snapdeal spokesperson told BQ Prime.
The SoftBank Group-backed company filed its papers in December of last year, hoping to raise Rs 1,250 crore through the sale of new shares and giving a partial exit to several existing shareholders, including SoftBank, who want to sell a total of around 3.1 crore shares.
Snapdeal was founded in 2010 as a deals website by Kunal Bahl and his friend Rohit Bansal. It moved into online shopping, where it competed with Amazon and Flipkart, which are now owned by Walmart Inc.
Though it entered the race to go public ahead of the Flipkart Group and Amazon.com Inc.’s India unit, the company’s operations are a notch below average in terms of order value.
Around 70.74% of the products sold on the platform were priced up to Rs 500 in the six months ended Sept. 30, 2021, according to Snapdeal’s DRHP. A Technopak report estimates a higher average order value for Flipkart and Amazon at Rs 1,200–1,500.