StyleAdda.com Posts Anual Loss Of INR 136 Crore, 2 PE Investors Quit

Online, July 29, 2012 (Newswire.com) - In a severe blow to its business plans, styleadda.com, the India's largest upcoming online shopping mall posted INR 136 crore or US $24 million annual loss. The announcement resulted in immediate crashing of its stock price on Exhilway Private Capital Market (EPCM) by 14.99% (the lower circuit) which shaved off INR 427 crore or US $75 million from its INR 2850 crore or US $500 million market cap.

The two private equity investors in the company has reportedly sold their entire stake for 37% loss. The PE investors are planning to exit at current valuations to minimize the losses. The investors believe that it will take almost six months for the company's management to decide new strategy and in the meanwhile the stock may crash by up to 80%, though some investors are still not pressing the panic button and is waiting for the opportunity to buy more stock when the price will touch its lows.

According to the insiders, styleadda.com which raised huge monies in expectation of making quick money in the e-commerce business has learned a hard lesson. The e-commerce portal scheduled to be launched in July this year got delayed and there is no announcement when it will be launched now.

The e-commerce venture suffered various blows before it posted the worst performance for an unlaunched business. The inventories are sold at a discounted price and the employees joined the competition.

Styleadda.com has decided to quit India as of now and focus only on developed international e-commerce markets like United States, United Kingdom and Gulf.

An email sent to StyleAdda.com's management elicited following response: "Our no private equity investor has exited so far, only the traders who picked stock positions for the short time have exited. Our vision to become India's biggest e-commerce venture remains intact, and we are planning to invest US $13.20 million or INR 750 crore into the business. We are facing some troubles in respect to mounting debt, but we assure investors that we will repay majority of our debt before we launch our business. Selling some equity stake is on cards and we are in talks with Newman Private Wealth to find us the potential suitor".

StyleAdda.com may auction 30% of its equity stake on EPCM to repay its debts.