E-commerce platform Snapdeal has filed a draft red herring prospectus (DRHP) with market regulator Sebi to raise Rs. 1,250 crores through issuance of new shares. Snapdeal says it plans to use Rs. 900 crores from IPO proceeds to fund for organic growth initiatives.

The IPO drives an offer for sale (OFS) component of 30,769,600 shares expecting Snapdeal’s current investors like SoftBank, Foxconn, Sequoia Capital and The Ontario Teachers' Pension Plan Board to sell parts of their holding in the company.

SoftBank is said to probably dilute the stake to below 25 percent in Snapdeal as the etailer wants to list as a professionally managed company. SoftBank owns more than 35 percent in Snapdeal with significant influence over the firm.

Snapdeal, formerly a competitor to Flipkart and Amazon India, clocked a total income of little over Rs 510 crore in the fiscal year 2021 compared to Rs. 916 crore in the fiscal year 2020 down by 44 percent. Its losses for the same period were at Rs. 125 crore compared to Rs. 274 crore a year ago which was down by 54 percent. Snapdeal testified a total income of Rs. 252 crore in the first six months of the current financial year with a loss of over Rs. 175 crore.

According to DRHP, Snapdeal adage a net merchandise value (NMV) of Rs. 374 crore in the second quarter of FY22 compared to Rs. 290 crore in the first quarter of FY22 and Rs. 205 crore in the final quarter of FY21. The company expects in delivering 8.59 million units during the second quarter of fiscal year 2022.

Snapdeal founders Kunal Bahl and Rohit Bansal, who own over 20 percent of the company,
are not selling any shares in the company’s upcoming IPO. For Company a successful IPO would mark a major shift after losing out to Amazon India and Walmart-owned Flipkart in the race to be India’s top ecommerce trouper.