The company hasn't settled on a new deadline for the IPO, despite having previously declared placing more than 3 crore shares up for offer for sale as part of its IPO plan.
What happened: The e-commerce company Snapdeal has postponed its first public offering (IPO), through which it was planned to issue fresh equity shares for Rs 1,250 crore, due to the uncertain market.
Why it matters: The company's valuation was assessed to be between USD 1.5 and 1.7 billion when the drafted document was submitted to the Securities and Exchange Board of India (SEBI).
Because of immense competition faced from rivals Amazon and Flipkart, Snapdeal, formerly a major player in Indian e-commerce, has experienced a decline in its success.
The big picture: As part of the offer, a number of companies were selling their shares, including Starfish I Pte, Wonderful Stars, Sequoia Capital, Kenneth Stuart Glass, Myriad Opportunities Master Fund, Ontario Teacher's Pension Plan Board, Laurent Amouyal, and Milestone Trusteeship Services.
However, Snapdeal's founders Kunal Bahl and Rohit Bansal were not selling their holdings in the IPO.
Backdrop: Snapdeal gave up on a potential merger deal with Flipkart in 2017 and instead pursued what the business called the "Snapdeal 2.0" plan in an effort to become "financially self-sustainable."
Numbers: Over 80% of Snapdeal's customers reside outside of large cities, and more than 90% of the products sold on the website have a price below Rs 1,000. This suggests that the business only concentrates on the value market.
What is being said: A Snapdeal executive stated that-
“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.”
Catch up quick: Amid weak market situations, Snapdeal, former Indian e-commerce giant has had to shelve its IPO plans.
