World News

Snapdeal to pause $152 million IPO (public offering) amid tech stock slump

[ad_1]

Snapdeal filed a request this week with SEBI to withdraw its IPO prospectus. (Case)

Mumbai:

Indian e-commerce firm Snapdeal, backed by SoftBank, has decided to pull the plug on its $152 million IPO, the company told Reuters, making it the latest victim of a slump in tech stocks that has taken hold. soured investors.

Snapdeal filed its regulatory IPO (IPO) documents for approval in December 2021, a year that has seen many stock market debuts and record fundraising by Indian startups. But many are delaying IPOs amid a stock market rout that has raised concerns about frothy tech valuations.

Snapdeal, which competes with bigger rivals Amazon and Walmart’s Flipkart in India’s burgeoning e-commerce space, filed a request this week with the country’s market regulator, SEBI, to withdraw its prospectus from IPO, said a source with direct knowledge of the matter.

“There is no appetite for tech stocks right now,” the source said, adding that SEBI had been briefed on prevailing market conditions and some other strategic decisions that contributed to the change. IPO plans.

In a statement to Reuters, Snapdeal said it had decided to withdraw the IPO prospectus “given prevailing market conditions,” without giving further details. He adds that Snapdeal may reconsider an IPO in the future depending on its capital needs and market conditions.

New Delhi-based Snapdeal was launched in 2010 by Wharton alumnus Kunal Bahl and Indian Institute of Technology graduate Rohit Bansal. The company says it caters to the so-called value e-commerce segment by selling “value-for-money” products, or more affordable products through its shopping website and app.

Valued at $6.5 billion in 2016, Snapdeal has seen its popularity dwindle over the years as competition has grown. It posted losses for the last three financial years between 2019 and 2021 and hoped to raise new funds via an IPO at a valuation of $1 billion.

The change in Snapdeal’s plans comes as India-listed tech stocks in recent years face anger from investors.

Shares of Indian digital payments company Paytm, which raised $2.5 billion in one of the country’s largest IPOs in November 2021, have fallen 76% since their debut.

Shares of food delivery company Zomato have halved from all-time highs after listing in July 2021.

In August, Indian online drugstore PharmEasy, backed by TPG and Prosus, withdrew its paperwork for its $760 million IPO, while Warburg Pincus-backed wireless headphone seller boAT Lifestyle also withdrew its paperwork for its $760 million IPO. withdrew his papers in October.

The first source added that Snapdeal has not decided on a new timeline for when it might file for its IPO again.

Snapdeal had wanted to fund organic growth initiatives with proceeds from its IPO, which was to include a new equity issue worth 12.5 billion rupees ($152 million) and an offer to sell 30.8 million shares.

Investors SoftBank, Sequoia Capital and the Ontario Teachers’ Pension Plan Board had offered to sell some of their stakes in the IPO.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Featured Video of the Day

Sensex crashes over 500 points, extending losses for third straight day

[ad_2]

ndtv

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button