According to people familiar with the matter, 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.
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The people said that the e-commerce giant is planning to go public in early 2022 after filing the draft red herring prospectus, or DRHP, and asked 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 $200 million at a $1.5 billion valuation, they said.
The company didn't provide a statement on its filing plans or other financial details.
Snapdeal, which caters to the fast-growing segment of smaller-city consumers, somewhat neglected by larger rivals, would become the largest tech company to test investor appetite for IPOs after the disastrous debut of Paytm's parent One 97 Communications Ltd. Since its debut on November 18, the fintech giant has lost 20% of its share value.
In September, Bloomberg News reported that Snapdeal had considered raising $400 million at a valuation of up to $2.5 billion. It hopes to emulate the strong showings of other online commerce firms like food delivery platform Zomato Ltd. and beauty retailer FSN E-Commerce Ventures Ltd., which owns Nykaa. The people said that Snapdeal's largest shareholders, including BlackRock Inc. Temasek Holdings Pte and EBay Inc., are not selling shares.
In 2010, the startup co-founded by Wharton alumnus Kunal Bahl focuses on the less-affluent and less tech-savvy bulk of the population living outside India's biggest cities. It is against 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 Flipkart. Walmart has since bought a controlling stake in Flipkart, which is now moving toward its own IPO. Newer entrants such as Mukesh Ambani's Reliance conglomerate threaten to disrupt the industry.
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Snapdeal is one of the few Indian companies that are attempting to raise more than $1 billion from IPOs in December.
According to people who know about the matter, the hopefuls who are aiming to sell shares next month are Warburg Pincus-backed pharmacy chain MedPlus Health Services Ltd. and Healthium Medtech Ltd., a maker of surgical instruments controlled by buyout firm Apax Partners. Other companies include Shriram Properties Ltd. and Vedant Fashions Ltd.
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