SoftBank-backed e-commerce marketplace Snapdeal has deferred its Rs 1,250 crore IPO, joining the list of startups that have decided to shelve their initial public offering (IPO) plans this year.

Snapdeal, which competes with Amazon and Flipkart, filed a request this week with the Securities and Exchange Board of India (Sebi) to withdraw its draft red herring prospectus (DRHP) amid a sell-off in tech stocks worldwide.

"Considering the prevailing market conditions, the company has decided to withdraw the DRHP. The company may reconsider an IPO in the future, depending on its need for growth capital and market conditions," a Snapdeal spokesperson said.

The company has not decided on any fresh timeline for the IPO.

It joins the likes of Boat, PharmEasy and Droom, who have shelved their IPO plans.

Snapdeal filed the IPO papers Sebi last December, following the public listing of several tech companies like Zomato, Paytm, Nykaa and Nazara Technologies.

Sebi was yet to approve Snapdeal's proposed IPO.

Founded by Kunal Bahl and Rohit Bansal in 2010, Snapdeal had planned to use the bulk of the IPO proceeds to fund organic growth.

In its draft public offering, Snapdeal was aiming for a primary issuance of shares worth Rs 1,250 crore. The company was also looking for an offer-for-sale (OFS) from existing investors of up to 3.07 crore shares.

Snapdeal's largest shareholder SoftBank, which owns a 35.67 per cent stake via its affiliate Starfish Pte Ltd, was expected to sell up to 2.4 crore shares, while another shareholder chip maker Foxconn's affiliate Wonderful Stars Pte Ltd had planned to sell up to 29.7 lakh shares in the company.

Canada's Ontario Teacher's Pension Plan Board (OTPPB), Myriad Opportunities Master Fund and Sequoia Capital were also likely to offload their shares.

Snapdeal posted losses in the last three financial years. Its consolidated operating revenues slid 44 per cent to Rs 471.8 crore in 2020-21, while losses less than halved to Rs 125.4 crore. The company is yet to publish its financials for FY22.

At the time of filing the draft paper with the Sebi, market sources had indicated the company is looking at a valuation of over USD 1.5 to 1.7 billion.

Under the offer, Starfish I Pte, Wonderful Stars, Sequoia Capital, Kenneth Stuart Glass, Myriad Opportunities Master Fund, Ontario Teacher's Pension Plan Board, Laurent Amouyal and Milestone Trusteeship Services were selling their shares.

However, Snapdeal's founders Kunal Bahl and Rohit Bansal were not selling their holdings in the IPO.

Once a leading player in the Indian e-commerce space, Snapdeal has seen its fortunes falling amid strong competition from rivals Amazon and Flipkart.

In 2017, Snapdeal walked away from a potential merger deal with Flipkart and instead pursued what it called the 'Snapdeal 2.0' strategy to become "financially self-sustainable".

Snapdeal focuses exclusively on the value segment, with more than 90 per cent of the products sold on the platform priced below Rs 1,000 and more than 80 per cent of its users residing beyond the metro cities.

It has announced its plans to expand into omnichannel distribution through partner-driven offline stores.