Snapdeal takes first step towards primary markets, initiates talks with Goldman Sachs, Credit Suisse

NEW DELHI:Jasper Infotech, which owns and operates India's largest online marketplace Snapdeal, has held talks with at least two merchant bankers as it considers a public market debut in the next 12 to 18 months.

The New Delhi-based company has begun preliminary discussions with Goldman Sachs and Credit Suisse, according to two people privy to the development, becoming one of the early movers in what is expected to be a rush of IPOs by consumer internet companies.

Snapdeal, which was valued at $1 billion (about Rs 6,000 crore) after its last funding round in May earlier this year, has raised some $320 million in several rounds.


In an emailed response to a questionnaire from ET, Snapdeal said that going public will be one of the many options that will be considered by its board.

“There is no decision made regarding the same, and neither have any bankers been selected. We will continue to watch the IPO markets, especially the response to Alibaba's upcoming offering given the similarities in our business models,“ the email said.

China's Alibaba is expected to raise at least $20 billion in a US public market debut expected in August.

Kunal Bahl, the co-founder and CEO of Snapdeal, has said previously that his company will look to list on a US exchange by the end of the next fiscal, by which time it will have crossed $1 billion in annual sales and be profitable as well.

Credit Suisse and Goldman Sachs declined to comment.

Prominent consumer internet companies that have already announced their listing plans, and are expected to debut on the bourses in the current financial year, include BharatMatrimony.com and Network18's HomeShop18.com.

While BharatMatrimony, which is expected to list on the domestic exchanges, is looking to raise about $125 million (Rs 748 crore) , HomeShop18 has announced that it will list on the New York Stock Exchange, and is looking to raise about $75 million (about Rs 450 crore) in the process.

India's largest online retailer Flipkart, which acquired fashion portal Myntra last month, is also expected to list on the Nasdaq next year. Online travel site Yatra.com is also priming themselves for public market debuts.

“Some of these companies have reached a certain amount of scale, where they can now test the waters by going for an IPO... There is a lot of pent-up demand for good equity stories,“ said Karan Marwah, partner at global consultancy KPMG.

Credit Suisse was Snapdeal's sole financial advisor when the company secured $100 million in funding last month from a consortium of new investors, including BlackRock Financial Management, Singapore's sovereign wealth fund Temasek and Hong Kong-based Myriad Asset Management.

Snapdeal also counts eBay Inc, PremjiInvest and Intel Capital as its backers.

The company having secured funding from hedge funds such as Myriad Asset Management and Tybourne Capital Management is also being regarded as a strong indication of the company's intention to list at the earliest opportunity.

Hedge funds, typically, have a shorter holding period of around two years, and are typically pre-IPO investors in privately-held companies.

“While that has been an indicator, given the scale of their operations, the most viable option is to exit through IPOs,“ said KPMG's Marwah.