Sunday, November 24

Struggling E-commerce Company Snapdeal Rope in SBI Caps and Kotak Mahindra Capital For IPO in 2019

Struggling ecommerce major Snapdeal has sounded out five merchant bankers, including SBI Caps and Kotak Mahindra Capital, to work on a public offer that is likely to hit the market in the second half of 2019.

The third largest marketplace majority owned by Japanese giant SoftBank has also reportedly appointed Swiss investment banking major Credit Suisse as a special advisor for the share sale, people aware of the development told PTI.

“The IPO process is on with in earnest and may open in the second half of calender 2019, depending on the market sentiment. The management has zeroed in on five i-bankers incluing SBI Caps and Kotak MahindraBSE 0.82 % Capital,”said the source.

The source also said out of the five i-bankers sounded out, it will pick only one lead-banker that could be either SBI Caps or Kotak.

It has also sounded out top law firms Amarchand Mangaldas, AZB & Partners and Khaitan & Co to advise it on the proposed share sale plan.

The development comes within days of co-founder and chief executive Kunal Bahl writing to the employees, whose numbers have come down to under 3,000 from 7,000 a year ago, asking them to prepare for an IPO a la the hugely successful share sale by retailer D-Mart, that was oversubcribed over 100 times and made a market debut with a whopping 114 per cent premium a fortnight ago.

The Gurgaon-based Snapdeal which has been burning money to compete with its larger rivals Flipkart and the American giant Amazon, is reported to have only cash left for a year at best, and is desperately to raise funds amidst reports that existing investors led by Softbank which own 33 per cent and Kalari Capital want it to be merged with Flipkart or Paytm.

Due to cash cruch and massive write-down in valuations the company has reduced costs by 60 per cent, Bahl said in the March 27 letter and also reported slashed one-third of its employee-count in the past one year alone, is focusing on growing in profitably, which the management feels is possible through an IPO.

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