SoftBank-backed Indian e-commerce firm Snapdeal has decided to drop its $152 million IPO in the wake of tough stock market conditions, Reuters news report said.
Snapdeal filed its initial public offering (IPO) regulatory papers for approval in December 2021. But many are delaying IPOs amid a stock market rout that has raised concerns over tech valuations.
Snapdeal, which competes with rivals Amazon.com and Walmart’s Flipkart in India’s e-commerce space, filed a request this week with the country’s market regulator SEBI to withdraw its IPO prospectus.
Snapdeal said it decided to withdraw the IPO prospectus considering the prevailing market conditions, without elaborating. It added that Snapdeal may reconsider an IPO in future depending on its 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 value e-commerce segment by selling more affordable products via its shopping website and app.
Valued at $6.5 billion in 2016, Snapdeal has seen its popularity dwindle over the years as competition increased. Snapdeal has recorded losses in the last three financial years between 2019 and 2021, and was hoping to raise new funds via IPO at a valuation of $1 billion.
Investors lost confidence in tech stocks in India that listed in recent years.
Shares in Indian digital payments firm Paytm, which raised $2.5 billion in one of the country’s biggest ever IPOs in November 2021, have dropped 76 percent since their debut.
Food delivery firm Zomato’s shares have halved from their all-time highs after listing in July 2021.
In August, TPG and Prosus-funded Indian online pharmcy PharmEasy withdrew papers for its $760 million IPO, while Warburg Pincus-backed seller of wireless earphones, boAT Lifestyle, also withdrew its papers in October.
Investors SoftBank, Sequoia Capital and Ontario Teachers’ Pension Plan Board had offered to sell a part of their stakes in the IPO.