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    Snapdeal explores IPO, in talks with bankers

    Synopsis

    The online retailer has held talks with three investment banking firms, including JM Financial, to gauge market interest for the IPO, the sources said, adding that the talks were still at an early stage.

    snapdealAgencies
    Ecommerce platform Snapdeal is mulling an Initial Public Offering (IPO), sources aware of the matter said.

    The online retailer has held talks with three investment banking firms, including JM Financial, to gauge market interest for the IPO, the sources said, adding that the talks were still at an early stage. Axis Capital and at least one more investment banking firm are also in discussions with the company, the sources said.

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    The e-tailer, backed by Japan's SoftBank Group and China's Alibaba, was once seen as a challenger to Walmart-owned Flipkart and Amazon India but has largely focussed on selling unbranded products and reducing its monthly cash burn after it lost out in the race for the top spot in the Indian ecommerce universe.

    In 2017, Snapdeal walked away from a merger with bigger rival Flipkart.

    “It (Snapdeal) has initiated the talks, but nothing is frozen yet. They are in discussions with three bankers to understand the potential of a successful IPO in the next year or so,” a person aware of the matter said.

    A spokesperson for Snapdeal declined to comment. The investment banks mentioned earlier did not respond to ET’s queries.

    On Friday, news wire Bloomberg reported that Snapdeal was aiming for a valuation of up to $2.5 billion to raise about $400 million through the IPO.

    Before Snapdeal ran into trouble, it had expressed plans to list overseas but they did not materialise.

    If the company, founded by Kunal Bahl and Rohit Bansal in 2010, manages to go public at a valuation of $2 billion, it would mark a turnaround for the online retailer.

    Though it was valued at $6.5 billion during a secondary transaction in 2016 when it raised capital from investors like Ontario Teachers’ Pension Plan, its merger talks with Flipkart were at a marked-down valuation of around $1 billion the next year.

    Snapdeal was believed to be in talks with existing and new investors to raise about $100 million at a valuation of $800 million to $1.2 billion in 2019.
    The Economic Times

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