Snapdeal, flipkart

While Snapdeal may be struggling to even keep its business afloat, the company is setting its eyes on an Initial Public Offering. As per the reports, the e-commerce company is aiming to launch its IPO in the second half of 2019. This definitely comes as an utter surprise because Snapdeal has recently been part of other reports suggesting its sale to other prominent homegrown e-commerce giants.

The tentative time-frame isn’t the only thing revealed about the IPO. The reports also suggest that the New Delhi-based company is in talks with five merchant bankers for the IPO, including SBI Caps and Kotak Mahindra Capital.

Another report further suggests that Japanese giant SoftBank, which owns a majority share in the company, has also appointed Swiss investment banking major Credit Suisse as a special advisor for the share sale. A source, aware of the development, said:

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 including SBI Caps and Kotak Mahindra Capital.

While the company is in talks with around five firms, it will pick only one lead-banker that could be either SBI Caps or Kotak. Further, it has also sounded out top law firms Amarchand Mangaldas, AZB & Partners and Khaitan & Co to advise it on the proposed share sale plan.

This development comes only days after Snapdeal’s co-founder and CEO Kunal Bahl wrote to their employees to be prepared for an IPO. This was following the successful IPO by retailer D-Mart — which was oversubscribed over 100 times and debuted with over 114 percent premium.

As per the reports, Snapdeal – which burnt a lot of cash in order to get an edge over Amazon and Flipkart, now only has enough cash to last about a year, at best. The company has also been struggling to raise fresh funds for a long time. Snapdeal has now reportedly slashed its monthly cash burn by 80 percent, incurring a total of $4-5 million per month now, from $20-25 million per month in its bid to conserve cash.

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