Demonetization has stagnated the operations and pushed back the growth of the dominant members of the industry to a certain level in the country. One of these affected companies includes the Gurgaon-based online marketplace, Shopclues. The e-tailer has, thus, postponed its plans of a public listing till the first quarter of 2018.
The company reasons out the government’s decision of discarding high-value notes out of the system to deaccelerate growth plans by about three months. Chief executive Sanjay Sethi spoke over the matter, saying,
We lost three months because of demonetisation and we were pushed back. As far as the structure of the organisation goes, we are all set for an IPO. But bankers tell us that the best time to go for an IPO would be Q1 2018.
The company planned the listing of its shares on NASDAQ in September 2016, after securing $100 million in its E series investment round. The funding was led by GIC Pvt. Ltd. along with participation from Tiger Global Management and Nexus Venture Partners. Also, Shopclues recently collaborated with country’s major telecom provider Jio, offering Jio Welcome Offer to its users. Thus, making it easy for customers to buy a Jio Sim.
Till the company goes public, it will be engaged in grabbing further capital from prominent investors of the market.Recent years have been slow for IPOs, courtesy to internet-based platforms. Only 3 major companies have filed for an initial public offering that includes Infibeam in April 2016, JustDial in 2013, and Make My Trip in 2010. Flipkart, the widely popular e-commerce giant is also looking forward to its IPO, though the company has not yet detailed out any plans.
Shopclues services customers in small Indian cities and towns and claims to have gross sales, was $1.2 billion in the fiscal year ended March 2016. Further, the company is said to have increased revenues by 200% in the year 2016. Sethi further added,
We are still losing money, but we have been able to cap our (cash) burn by 50% while increasing our top line by 200%. This is sustainable growth and none of the changes we did to get here will be rolled back, We have done the spring cleaning that we had to do and now is the time to put more money into the top line.
Shopclues would be raising around $25-30 million in the current year and would channelize the same for marketing and brand building. Moreover, the company will roll out schemes in order to harness the coming GST scheme for its benefit. It also plans to push its boundaries further so as to grab more merchants delivering them best practices to sell online or just do commerce in general, or both.
For its IPO, Shopclues is in advanced talks with investment banks like Morgan Stanley, Goldman Sachs, and Citibank. With the recovery in IPO space, the company will run its initial public offering dodging the tentative market behind of it.