Snapdeal Limited IPO Company Profile :
Snapdeal offers an e-commerce platform for value-seeking yet aspirational users that can be conveniently accessed on their mobile phones through the application or through the mobile-optimized website of the company. The sellers on the platform offer quality merchandise that is based on the latest trends and are affordably priced. Snapdeal’s platform hosts a wide selection of value merchandise across categories, such as fashion; home and general merchandise; beauty and personal care; and others. Snapdeal was India’s largest pure-play value e-commerce platform, in terms of revenue for the Financial Year 2020. Further, with over 200 million app installations on Google Play Store, Snapdeal is the most installed pure-play value e-commerce application and one of the top four online lifestyle shopping destinations in terms of total app installations in India, as of August 31, 2021.
The value lifestyle e-commerce market (“value e-commerce”) in India is highly under-penetrated, with only 8% of trade conducted online (compared to 27% for the premium segment of lifestyle retail). RedSeer Research estimates that the value of the e-commerce opportunity in India may reach US$ 39.4 billion in size by Financial Year 2026 from US$7.4 billion in Financial Year 2021, growing at a CAGR of 39%. This will be driven by a projected increase in the online shopper base from an estimated 140 to 160million in the Financial Year 2021 to up to 350million in the Financial Year 2026.
Snapdeal has a strong focus on catering to the demand arising from users in Tier 2+ cities of India. For the six months that ended September 30, 2021, 13.07%, 14.45%, and 72.48% of the company’s shipped units were purchased by buyers in metro cities, Tier 1 cities, and Tier 2+ cities, respectively. With the increase in internet penetration in India, the company believes that users who currently buy from unorganized offline stores may be inclined to migrate to organized, “aspirational” and quality-focused platforms such as snapdeal which provide easy and efficient access to expanded selections of good quality, relevance and affordable prices.
Snapdeal Limited IPO Details:
| IPO Open Date | Not Disclosed |
| IPO Close Date | Not Disclosed |
| Listing Date | Not Disclosed |
| Face Value | ₹1 per share |
| Price | Not Disclosed |
| Lot Size | Not Disclosed |
| Issue Size | Not Disclosed |
| Fresh Issue | [.] Equity shares
aggregating up to ₹ 1,250 crores |
| Offer for Sale | 30,769,600 equity shares (aggregating up to ₹[.] cr) |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| QIB Shares Offered | Not more than 75% of the Offer |
| NII (HNI) Shares Offered | Not less than 15% of the Offer |
| Retail Shares Offered | Not less than 10% of the Offer |
Financial analysis:
| Particulars | 6M FY-22(in cr.) | FY-21(in cr.) | FY-20(in cr.) | FY-19(in cr.) | CAGR |
| Revenue from operations | 238.59 | 471.75 | 846.4 | 839.42 | -17.5% |
| Other Income | 14.25 | 38.51 | 70.26 | 85.9 | |
| Marketplace expense | 132.98 | 195.56 | 372.55 | 359.58 | |
| Employee Cost | 102.64 | 161.19 | 181.75 | 152.93 | |
| Other expenses | 182.5 | 228.53 | 625.3 | 574.8 | |
| EBITDA | -165.28 | -75.02 | -262.94 | -161.99 | -22.6% |
| EBITDA margin% | -69.27% | -15.90% | -31.07% | -19.30% | |
| Depreciation | 10.65 | 50.28 | 30.43 | 23.51 | |
| Interest | 0.31 | 0.78 | 0.98 | 2.96 | |
| LBT | -176.24 | -126.08 | -294.35 | -188.46 | -12.5% |
| Total tax | 1.18 | 0.9 | 0 | 1.46 | |
| LAT | -177.42 | -126.98 | -294.35 | -189.92 | -12.6% |
| Dep./revenue% | 4.46% | 10.66% | 3.60% | 2.80% | |
| Int./revenue% | 0.13% | 0.17% | 0.12% | 0.35% |
Pre-Offer shareholding of the Selling Shareholders:
| S. No. | Name of the Selling Shareholder | No. of Equity Shares
held |
Percentage of the pre-Offer paid
Up equity share capital (%) |
| 1. | Starfish I Pte. Ltd. | 140,680,480 | 35.41% |
| 2. | Wonderful StarsPte. Ltd. | 17,405,280 | 4.38% |
| 3. | Sequoia Capital India III Ltd. | 2,217,600 | 0.56% |
| 4. | Kenneth Stuart Glass | 4,390,400 | 1.11% |
| 5. | Myriad Opportunities Master Fund Limited | 3,811,520 | 0.96% |
| 6. | Ontario Teacher’s Pension Plan Board | 7,979,520 | 2.01% |
| 7. | Laurent Amouyal | 747,200 | 0.19% |
| 8. | Milestone Trusteeship Services Private Limited | 2,960,000 | 0.75% |
| Total | 180,192,000 | 45.35% |
Offer for Sale Details:
| S. No. | Name of the Selling Shareholder | Number of Equity Shares
being offered in the Offer for Sale (Up to) |
| 1. | Starfish I Pte. Ltd. | 24,000,000 Equity Shares |
| 2. | Wonderful StarsPte. Ltd. | 2,968,000 Equity Shares |
| 3. | Sequoia Capital India III Ltd. | 412,000 Equity Shares |
| 4. | Kenneth Stuart Glass | 748,000 Equity Shares |
| 5. | Myriad Opportunities Master Fund Limited | 649,600 Equity Shares |
| 6. | Ontario Teacher’s Pension Plan Board | 1,360,000 Equity Shares |
| 7. | Laurent Amouyal | 128,000 Equity Shares |
| 8. | Milestone Trusteeship Services Private Limited | 504,000 Equity Shares |
Strengths:
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Snapdeal was India’s largest pure-play value e-commerce platform, in terms of revenue for the Financial Year 2020. Further, with over 200 million app installations on Google Play Store, snapdeal is the most installed pure-play value e-commerce application and one of the top four online lifestyle shopping destinations in terms of total app installations in India, as of August 31, 2021.
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Snapdeal attracts users through its platform’s wide selection of value merchandize, affordable pricing, quality, and a reliable user experience. This makes the company a ‘one stop shop’ for the users’ value shopping needs. Our platform hosts a wide selection of value merchandize across categories, such as fashion; home and general merchandise; beauty and personal care; and others, which constituted 52.56%, 24.76%, 12.98%, and 9.71% of the sales value on its platform for the six months ended September 30, 2021, respectively.
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Snapdeal’s recently-launched “Power Brands” initiative is aimed at creating a network of sellers who can offer good quality products at affordable prices, create assortment differentiation and potentially enhance margins for its platform. Brand rights and intellectual property for “Power Brands” are owned by the company that the company license to selected sellers. Power Brands” is a new initiative, and the company has created 13 “Power Brands” since its launch, which account for 5.60% of the total orders during the six months that ended September 30, 2021.
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Snapdeal attracts users by providing an easy-to-use interface, which is coupled with a personalized browsing experience. The company utilizes methods such as artificial intelligence, machine learning algorithms, and data science to analyze large volumes of data relating to user browsing and purchasing behaviour, such as their activity history, geo-location and address history, category view history, and product view history. Using this data, the algorithms automatically personalize the user’s experience to their tastes and preferences.
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Snapdeal marquee investors include eBay, Intel Capital, BlackRock, Temasek, SoftBank, PremjiInvest, and RNT Associates Private Limited (promoted by Ratan Tata), some of which have invested in us since 2013. The company benefits from the strong capital sponsorship, professional expertise, and strategic business advice of its marquee shareholders.
Risk factors:
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Snapdeal has recorded losses in the past and may continue to do so in the future, and if it fails to increase the number of delivered units, NMV, or to acquire new users in a cost-effective manner, therefore may not be able to increase its revenues or be profitable.
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Any harm to the Snapdeal brand or reputation or failure to maintain, protect and enhance the brand could limit its ability to retain or expand its customer base which may adversely affect its business, financial condition, results of operations, and cash flows, and may result in it being unable to attract new users.
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If Snapdeal fails to retain its relationships with sellers of its recently launched “Power Brands” initiative, attract new relationships, or fail to further develop its “Power Brands” portfolio, the business, financial condition, and operations will be adversely affected of the company
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Online and offline competitors may offer goods and services that the company does not offer. In addition, competitors may innovate faster and more efficiently, and new technologies may increase competitive pressures by enabling competitors to offer more efficient or lower-cost services or offer products directly to users. If Snapdeal is unable to change its offerings in ways that reflect the changing demands of offline and online sellers and marketplaces or compete effectively with and adapt to such changes, the business, financial condition, results of operations and cash flows of the company would be adversely affected.
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Snapdeal’s technology infrastructure and the technology infrastructure of its third-party providers are susceptible to security breaches and cyber-attacks. This could potentially result in damage to the operations, employees, users, third-party providers, and its reputation and adversely affect the company’s financial condition, results of operations, and cash flows.
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Snapdeal relies exclusively on third-party logistics service providers and the UniMove Logistics Platform for the deliveries of products to the buyers, and any disruption of or interference with their services could adversely affect the business, financial condition, cash flows, and results of operations of the company
Objects of the Offer:
Snapdeal proposes to utilize the Net Proceeds of the Fresh Issue towards funding the following objects:
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Funding organic growth through marketing and business promotion to attract new users and retain existing users on the platform, and upgradation of the technology infrastructure
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General corporate purpose
Snapdeal Limited IPO Prospectus:
Registrar to the offer:
Link Intime India Private Limited
C-101, 1stFloor, 247 Park
L.B.S. Marg, Vikhroli (West)
Mumbai 400 083
Maharashtra, India
Tel: (+ 91 22) 4918 6200
E-mail: snapdeal.ipo@linkintime.co.in
Website: www.linkintime.co.in
Investor grievance E-mail: ixigo.ipo@linkintime.co.in
Contact person: Shanti Gopalkrishnan
SEBI Registration No.: INR000004058
Snapdeal Limited IPO FAQ
Ans.Snapdeal Limited IPO will comprise fresh share issue and new offer share issue. The company aims to go public to accelerate its growth and expansion plan.
Ans. The company will open for subscription on <>.
Ans. The minimum lot size that investors can subscribe to is <> shares.
Ans. The Snapdeal Limited IPO listing date is <>.
Ans. The minimum lot size for this upcoming IPO is <> shares.