The Snapdeal IPO may be launched at a later date. According to the firm, a move will depend on their need for capital at that time.
Indian e-commerce marketplace Snapdeal is cutting its plans to float its Initial Public Offering (IPO) in which it plans to raise the sum of $152 million from investors. The company submitted a filing to the country’s market regulator SEBI in order to withdraw its IPO Prospectus, sources close to the matter confirmed.
The move from Snapdeal puts an end to the more than 11 months of planning that the startup has put into planning its IPO. The company filed to go public in December 2021 as it looks to trail a number of high-growth tech stocks that went public in that fiscal year.
While the year 2021 was a great one for many Indian stocks, the opposite was the case this year as the global economy recorded one of its most significant strains in the past decade as triggered by the ongoing war between Russia and Ukraine. The year thus far has seen a drop in Indian tech valuations, a trend that is encompassing.
Snapdeal was founded in 2016 by Kunal Bahl and Rohit Bansal and it quickly gained prominence as one of the go-to platforms for buying groceries online. Today, the company provides competition to the likes of Amazon.com Inc (NASDAQ: AMZN) and Flipkart, a Walmart-backed eCommerce platform.
Snapdeal said in a statement that it is withdrawing its IPO plans “considering the prevailing market conditions.” Though the company did not give many details, the anonymous sources interviewed by Reuters confirmed that a part of the reason is because of the dwindling appetite for Indian tech stocks.
At its peak, Snapdeal was valued at $6.5 billion as of 2016, and it recorded consistent losses in 2019, 2020, and 2021.
Snapdeal IPO May Come at a Later Date
The Snapdeal IPO may be launched at a later date according to the firm, a move that will be dependent on its need for capital at that time.
Snapdeal will not be the only startup that has killed its IPO plans in recent times. In August this year, PharmEasy, one of India’s most trusted online pharmacy & medical stores offering pharmaceutical and healthcare products at a FLAT 20% OFF, also pulled the plug on its IPO plans, public fundraising that would have helped it generate the sum of $760 million.
Besides Snapdeal and PharmEasy, boAT Lifestyle, a wireless headphones company is also putting its IPO plans on hold.
The valuation of most tech stocks has been down thus far this year and Snapdeal would have seen its valuation pegged at $1 billion had it moved on with the IPO. Many tech stocks that went public last year have seen a considerable plunge in their valuation. From the 76% drop in Paytm shares to the more than 50% slump in Zomato Ltd (NSE: ZOMATO) stock, the battery has been quite encompassing.