Snapdeal is the fifth tech company in India to delay its IPO plans. (File)
New Delhi:
E-commerce giant Snapdeal has suspended its $152 million IPO (initial public offering) plans amid a defeat in technology stocks in the prevailing adverse market conditions.
Snapdeal told DailyExpertNews that the company is retracting the IPO papers filed with the Securities and Exchange Board of India (SEBI) a year ago.
Softbank-backed Snapdeal may reconsider its IPO plans depending on the company’s need for capital and market conditions.
It’s been a roller coaster ride for new tech companies over the past few months. Shares of most of these companies took a nosedive as recession fears gripped the market during the war between Russia and Ukraine. A series of rate hikes by the Fed Reserve to contain inflation further dampened investor sentiment. Large-scale tech layoffs have further accentuated the concerns.
Snapdeal’s rival in India, Amazon, for example, is likely to point the door at staff from different departments. Amazon employs more than 1.6 million people worldwide.
On the other hand, Walmart-promoted Flipkart India had reported that its loss for fiscal year 2021-2022 had increased to more than Rs 7,800 crore, PTI news agency reported.
The Indian e-commerce market continues to expand and many companies are looking forward to a larger share of this multi-billion dollar market. Founded by Kunal Bahl and Rohit Bansal in 2010, Snapdeal was an early riser in the e-commerce space, but stiff competition caused money-rich Amazon and Flipkart to take off.
Snapdeal is the fifth tech company in India to delay its IPO plans. Previously, start-ups such as Pharmeasy, boAt, Droom and Appameya Engineering had postponed their plans for a public offer in difficult market conditions.
PharmEasy, funded by TPG and Prosus, had filed papers for a $760 million IPO. BoAt Lifestyle, manufacturer of wireless earphones, called off its IPO plans in October this year.
These new-age companies decided to postpone their IPO plans amid a hammer of new-age stocks in the market. These include Paytm Nykaa and Zomato, the poster boys in the startup universe. As these stocks have been on the receiving end of investor anger, investors have lost significant wealth.
Market analysts have found that the poor investor sentiment surrounding new-age stocks can only be partly attributed to geopolitical situations. The bigger concern is about the profitability of these companies.
