The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Sharad Gupta, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur
Business Standard reported on 11th April, 2015, in article “Snapdeal plans American listing in 2016-17” about the Snapdeal’s plan to go public. Delhi-based e-commerce company Snapdeal just like it’s arch rival Flipkart is preparing itself for issuing its IPO in US markets. The valuation is estimated to be 5-6 billions. Snapdeal progress as reported by the company sources report about the appointment of merchant bankers who will facilitate the listing process in US.
This IPO is targeted to raise capital to expand its operations. It is also estimated that this will allow a few investors to exit from the company. The move to bring in bankers, will help the company which is in its initial stages to be prepared for legal inquiry and other formalities before it is open to public.
In 2013, there were plans to launch an IPO, but were left midway and weren’t executed because the firm shifted its focus to meeting stiff competition from Flipkart for the e commerce platform.
An expert from industry, Mr Yugal Joshi said, “Snapdeal has a healthy valuation and with investors like Softbank it should be able to conduct a successful IPO whenever it wants”. He also mentioned that the firm should prepare itself, as it is a young firm, soit should analyse if it will be able to withstand the scrutiny a listed company has to undergo.
Snapdeal’s largest investor is Japan’s SoftBank. Other Indian investors are Tata Group chairman, Ratan Tata and Wipro chairman, Azim Premji. It is also backed by American e commerce firm, eBay. Other investors include Nexus Venture Partners, Indo-US Venture Partners, Bessemer Venture Partners, Kalaari Capital, Intel Capital, Blackrock and Temasek Holdings. There was a unconfirmed news about the plan Snapdeal had to sell its stake to Alibaba, Chinese e commerce giant, but was not executed. This deal was rejected as it was seen as over valued.