Snapdeal files draft documents to raise Rs 1,250 Cr through public listing

Representative image.

Softbank-backed Snapdeal has filed draft papers to raise Rs 1,250 crore through a public issue.

There’s also an offer-for-sale of over three crore equity shares by existing shareholders, according to the draft red herring prospectus (DRHP).

Softbank, along with seven stakeholders such as Foxconn, Sequoia Capital and Ontario Teacher’s Pension Plan Board, will participate in the OFS for partial exits.

Collectively, this amounts to around 8 percent of the company’s pre-offer equity share capital.

Snapdeal has 71 shareholders. While Softbank has 35.41 percent of the pie, founders Kunal Bahl and Rohit Bansal together own 20.28 percent in the company. None of the two founders is diluting any stake.

The proceeds of the public issue will be used towards growth initiatives, expanding logistics capabilities and enhancing the company’s technology infrastructure.

Axis Capital Ltd, BofA Securities India Ltd, CLSA India Pvt Ltd and JM Financial Ltd are the book running lead managers to the issue.

Snapdeal targets middle-income, price-conscious buyers who predominantly live in smaller Indian cities. It receives more than 86 percent of its orders from outside metro cities.

Last week, in a blog, founder Kunal Bahl said that the company happens to be a brand that is not in the urban sub-consciousness. Bahl was sharing his insights into what he felt was a key question among urban Indians: “But, who buys from Snapdeal?”

Earlier this month, Moneycontrol had also reported that Snapdeal was all set to venture into the offline domain with the launch of partner stores across small cities with an aim to attract and cater to what is known as Bharat.

The first Snapdeal partner store will be launched in January. The company plans to gradually expand the number to around 25 by the end of 2022.

As per the DRHP, Snapdeal’s Net Merchandise Value (NMV) has grown 82.48 percent over the last two quarters from Rs 205 crore in the fourth quarter of FY2021 to Rs 374 crore in the second quarter of FY2022.

Ahead of the IPO, Unicommerce, Snapdeal’s fully owned subsidiary, raised investment from Softbank for around 30 percent stake, Moneycontrol reported last week.