Online marketplace Snapdeal is expected to file its draft initial public offering (IPO) papers with the country’s markets regulator Sebi (Securities and Exchange Board of India) in the next few days, people briefed on the matter said.

Snapdeal, once a challenger to Flipkart and Amazon India, is looking to raise around Rs 1,250 crore through primary share sale while the public issue will also have a secondary or offer for sale (OFS) component of anywhere between Rs 400-500 crore.

Japanese investor SoftBank, which made an early bets on the Indian ecommerce company, may offload parts of its holding in to trim its stake down to below 25%, sources added.

Snapdeal founders Kunal Bahl and Rohit Bansal are unlikely to sell any shares in the company’s upcoming IPO, people briefed on the matter said.

For Snapdeal, which began life in 2010, a successful IPO would mark a major turnaround after losing out to Amazon India and Walmart-owned Flipkart in the race to be India’s top ecommerce player.

The company over the last three-four years, has largely focussed on selling unbranded products and reducing its monthly cash burn.

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In 2017, it walked away from a potential merger with bigger rival Flipkart, which is now majority owned by Walmart.

As it prepares to seek Sebi’s nod for an IPO, Snapdeal has been focusing on segments like fashion, electronic accessories with the strategy to sell quality products at affordable prices.

A Snapdeal spokesperson declined to comment.

“They (value conscious buyers) prefer to not pay for brand premiums, but for what matters to them – good fit with their functional needs, trendy looks and styling, quality that lasts. A product that meets all these needs and is priced right is value,” Bahl said in a recent post on LinkedIn.

The company clocks around 80% of its total sales from 1,000 suppliers, but with no single seller accounting for more than 2% of its total sales, Bahl added in the post. 75% of our business comes from repeat customers. More than 70% of our sales are from beyond tier II towns and cities and 99% of our orders come via mobile phones, he said in the post.

Snapdeal has also created what it calls ‘Power Brands’ by working closely with suppliers. These are essentially based on product searches on Snapdeal which consumers are looking for but do not find them easily on the platform. Currently, the etailer owns over a dozen such Power Brands which constitute around 10% of its total sales.

“With more than 70% of our users from outside tier II towns buying affordable goods from us, delivering efficiently and economically across the span and depth of Bharat requires thoughtful and innovative ecommerce logistics solutions,” Bahl said in his post, explaining its logistics platform UniMove. It allocates third-party logistics players to specific legs of the delivery journey and essentially gives better visibility to the company in allocation and utilisation of resources for logistics.

The company is also setting up offline stores to have an omni-channel presence, a growing trend among internet-first businesses in India.

Snapdeal, sources said, has maintained an overall headcount of around 600 to stay lean. The company, in the past, has had to fire many after it scaled down operations and changed its focus in 2017.

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