HomeShop18, the multi-mode retail arm of Network18 has allegedly filed for a ‘Confidential IPO’ with the New-York Based Stock Exchange NASDAQ. With this initiative, the company hopes to raise about US$ 100 Million.
A Confidential IPO is a new technique of raising capital for established companies. Corporations who choose to file, do not have to disclose details or even the fact that they have opted for the same. This news has apparently been leaked & furthermore there is also juncture that the company is on the lookout for institutional investors, including private equity firms, to take up shares as part of the listing plan. An official statement from Sundeep Malhotra, Founder and CEO was non-committal, “We have ambitions to get listed and are open to it but it is premature to talk about it now. We cannot give any timeframe on that at the moment.”
Though such a technique is not new for US based technology companies, so far, only two Indian companies i.e. Rediff and MakeMyTrip have chosen this route of raising capital. Since 2008 HomeShop18 has successfully raised funds via multiple rounds of funding from private equity players. In fact SAIF Partners put in a total of US$ 26 Million in multiple rounds. Additionally the company even received US$ 18.5 Million from South Korean home shopping retailer GS Home Shopping.
So why this route?
Though a lot is not known due to confidentiality clauses surrounding such methods, companies can have a tight control of the entire process. Besides, fluctuations in the share prices can be heavily minimized thanks to the extremely limited number of investors. At the same time the company can enjoy a status of being a ‘Listed’. Companies enjoy a lot more trust from other organizations & the public in general when their ‘fate’ & absolute controlling power is in the hands of the investors.
HomeShop18’s current revenue is slightly more than US$ 140 Million & it offers resell of multiple categories & verticals via its online e-commerce portal & a dedicated television channel.
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