The company, which is targeting a $ 400 million IPO at a $ 2-2.5 billion valuation, has also named Bank of America in addition to Axis Bank and JM Financial for public listing.
One of Snapdeal’s existing investors, bound for the IPO, is exploring a side transaction for a partial exit from the company that could be valued at $ 30-50 million, according to sources familiar with the development.
Bank of America is seeking investors for this round, the sources added.
In addition to Softbank, Snapdeal counts Nexus, Alibaba, eBay, and BlackRock among some of the top investors on its capitalization table.
Moneycontrol could not immediately determine the name of the investor seeking to exit.
The company, which is targeting a $ 400 million IPO at a $ 2-2.5 billion valuation, has also named Bank of America in addition to Axis Bank and JM Financial for public listing.
The transaction is at an early stage.
“The company has no plans to do a primary round at this time. However, because there is momentum in the company’s shares, secondary rounds are being explored. There seems to be a lot of FOMO (fear of missing out) going into. Indian tech stocks. This may be working in the company’s favor, “one of the sources cited above told Moneycontrol requesting anonymity.
The Bank of America declined to comment.
In 2017, Snapdeal explored a much-talked-about merger with its larger rival Flipkart. However, after many comings and goings, he decided to go solo after a disagreement over the valuation offered on the table, ending all talks for an emergency sale.
The uptrend came from the fact that it had managed to sell its Freecharge payments unit to private lender Axis Bank for Rs 385 crore just a few days ago. The deal gave Snapdeal a much-needed cash break to survive.
Currently, Snapdeal is focusing on the value e-commerce landscape which, according to a recent report, is expected to grow 10 times in 10 years.
Its target has shifted to value-conscious buyers, especially those belonging to Tier 2, 3, 4 cities and smaller towns. It attracts around 80% of its business from non-metropolitan users and is strong in the fashion and home categories, which account for a large part of budget-conscious Indian household spending.
Keeping the focus in mind, it also recently added 130 new fulfillment centers to meet demand from the small town locations.
The value lifestyle e-commerce segment is expected to grow from $ 4 billion in 2019 to $ 20 billion in 2026 and $ 40 billion in 2030, says the report issued by global management consultancy Kearney.
Snapdeal did not respond to a media inquiry.
