Amazon rival Snapdeal reveals sales bounce before India IPO

Amazon rival Snapdeal reveals sales bounce before India IPO

Bloomberg/New Delhi

Snapdeal Ltd, the Indian e-commerce startup backed by SoftBank Group Corp, filed preliminary documents for an initial public offering, adding to the rush of tech companies looking to debut on the country’s exchanges amid a record-breaking stock market rally.

The New Delhi-headquartered company plans to raise Rs12.5bn ($165mn) through the sale of new shares, according to its draft red herring prospectus, or DRHP, filed with the Securities and Exchange Board of India. In addition, existing stockholders including SoftBank plan to sell as many as 30.77mn secondary shares.

Snapdeal, founded in 2010, once rivalled Amazon.com Inc and Walmart Inc’s Flipkart in the burgeoning India market, but fell behind as its deep-pocketed competitors invested heavily to grab market share. Revenue from operations dived 44% to just Rs4.7bn in the year ended March 2021 as the two bigger players eroded its share of the market. Its loss narrowed by more than half to Rs1.25bn. 

Snapdeal has refashioned itself to stand apart from its bigger competitors and focus on value-driven e-commerce. The company, whose other backers include eBay Inc and Sequoia, recorded operating revenue of about Rs2.4bn in the six months to September 30. It reported an 82% jump in net merchandise value,