Snapdeal, the Indian online retailer backed by SoftBank Group Corp. and Alibaba Group Holding Ltd., plans to file preliminary documents for an initial public offering of as much as $250 million in the next few weeks, according to people familiar with the matter.
The e-commerce giant aims to go public in early 2022 after filing the draft red herring prospectus, or DRHP, the people said, asking not to be identified talking about a private matter. Snapdeal, once considered the fiercest rival to Amazon.com Inc. and Walmart Inc.¡¯s Flipkart in the world¡¯s fastest-growing major online arena, plans to raise at least $200 million at a $1.5 billion valuation, they added.
The company didn¡¯t immediately provide comment on its filing plans or other financial details.
Snapdeal, which caters mainly to the fast-growing segment of smaller-city consumers somewhat neglected by larger rivals, would become the largest tech company to test investors¡¯ appetite for IPOs after the disastrous debut of Paytm¡¯s parent, One 97 Communications Ltd. The fintech giant has lost about 20% of its share value since its debut on Nov. 18.
Snapdeal had considered raising about $400 million at a valuation of up to $2.5 billion, Bloomberg News reported in September. It¡¯s now hoping instead to replicate the strong showings of fellow online commerce firms like food delivery platform Zomato Ltd. and beauty retailer FSN E-Commerce Ventures Ltd., which owns Nykaa. Snapdeal¡¯s largest shareholders, which also include BlackRock Inc., Temasek Holdings Pte and EBay Inc., are not selling shares, the people said.
The startup co-founded by Wharton alumnus Kunal Bahl in 2010 focuses on the less-affluent and less tech-savvy bulk of the population living outside India¡¯s biggest cities. It bucks the trend set by Amazon and Flipkart by not catering to big-city buyers and eschewing big-ticket items like high-priced electronics.
It emerged as one of the country¡¯s leading e-commerce providers but lost ground to its larger rivals. In 2017, it backed away from a potential merger with Flipkart that would have united the two local-e-commerce companies against Amazon, a deal that SoftBank had pushed for.
The Japanese investor then turned around to lead a funding round for arch-rival Flipkart. Since then, Walmart bought a controlling stake in Flipkart, which is now progressing toward its own IPO. Newer entrants such as Mukesh Ambani¡¯s Reliance conglomerate are also threatening to further disrupt the industry.
Snapdeal will follow a clutch of Indian companies pushing to raise more than $1 billion combined from IPOs in December.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.