Snapdeal's change of plans comes as tech stocks in India that have listed in recent years are facing investor ire.
• Snapdeal files its initial public offering (IPO) regulatory paper for approval in December 2021
MUMBAI: SoftBank-backed Indian e-commerce firm Snapdeal 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 hit investor sentiment. Is.
Snapdeal filed its initial public offering (IPO) regulatory paper for approval in December 2021, a year that saw several stock market debuts and record fund-raising by Indian startups. But many are delaying IPOs amid the stock market slide, which has raised concerns over murky technical valuations.
Snapdeal, which competes with big rivals Amazon and Walmart's Flipkart in India's booming e-commerce space, this week filed a request to withdraw its IPO prospectus with the country's markets regulator Sebi, people with direct knowledge of the matter said. said a source.
"There is no appetite for tech stocks at the moment," the source said, adding that Sebi has been informed about the current market conditions and some other strategic decisions that contributed to the change in IPO plans.
In a statement to Reuters, Snapdeal said it has decided to withdraw the IPO prospectus "taking into account the current market conditions" without elaborating. It added that Snapdeal may reconsider an IPO in future depending on the need for capital and market conditions.
New Delhi-based Snapdeal was started 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", or more affordable products, through its shopping website and app.
Snapdeal, valued at $6.5 billion in 2016, has seen its popularity decrease over the years with increased competition. It has reported losses in the last three financial years between 2019 and 2021, and was hoping to raise fresh funds through an IPO at a valuation of $1 billion.
Snapdeal's change of plans comes as tech stocks in India that have listed in recent years are facing investor ire.
Shares of Indian digital payments firm Paytm, which raised $2.5 billion in November 2021 in one of the country's biggest IPOs, have fallen 76% since its debut.
Shares of food delivery firm Zomato have halved from their all-time high after getting listed in July 2021.
In August, TPG and Prosus-funded Indian online pharmacy PharmEasy withdrew papers for its $760 million IPO, while boAT Lifestyle, seller of Warburg Pincus-backed wireless earphones, also withdrew papers in October.
The first source said that Snapdeal has not set any new deadline to re-file its IPO.
Snapdeal wanted to finance organic growth initiatives with the proceeds of its IPO, which included a fresh issue of shares worth 12.5 billion rupees ($152 million) and an offer for sale of 30.8 million shares.
Investors SoftBank, Sequoia Capital and the Ontario Teachers' Pension Plan Board offered to sell a portion of their stake in the IPO.
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