Walmart Preparing For $10 Billion Flipkart IPO

• Walmart is preparing the e-commerce major Flipkart's $10 billion IPO in the US.
• The US retailer aims to sell around 25% of the stake in Bengaluru-based e-commerce company, said reports.
• In July this year, Flipkart raised $1.2 billion in funding, valuing the company at $24.9 billion.

US retail giant Walmart is reportedly preparing for Flipkart's $10 billion IPO (Initial Public Offering) in the US. In which Walmart aims to sell around 25% of the stake in the Bengaluru-based e-commerce company.

The Arkansas-based Walmart has recently hired Goldman Sachs to explore Flipkart's IPO plan, mint reported.

A $10 billion IPO would value the e-commerce giant at $40 billion. If this happens, it will be the largest IPO in overseas exchanges by an India-based company. Additionally, Flipkart's valuation will also be doubled to $40 billion since the acquisition.

In 2018, US-based retail giant Walmart bought Flipkart 77% stake for $16 billion in which it had pledged to take Flipkart public in four years. In September this year, Reuters had reported that Flipkart is planning to go public in 2021.

In July 2020, Flipkart had raised $1.2 billion in funding from Walmart as a lead investor. That round valued the company at $24.9 billion. China-based Tencent has also invested $62.8 million in Flipkart as part of a corporate venture funding round.

At present, Walmart owns an 82.3% stake in Flipkart, with US-based hedge fund Tiger Management, China’s Tencent, Accel Partners, and Microsoft Corporation, among the other key investors.

The upcoming IPO will offer an opportunity for minority investors to sell or pare their holdings.

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Flipkart’s Indian companies are owned by Flipkart Pvt. Ltd, which was set up in 2011 in Singapore. Taking the Singapore company public in the US will help Walmart sidestep restrictions on Indian firms listing on foreign stock exchanges.

Flipkart Pvt. Ltd. owns eight Indian companies, including Flipkart Internet Pvt. Ltd, Flipkart India Pvt. Ltd, and Flipkart Logistics Pvt. Ltd.

In mid-September 2020, Flipkart had partnered with Paytm, allowing its customers to pay through Paytm on the checkout page.

While Flipkart-owned digital payments platform PhonePe is also planning to list on a US stock exchange by 2023 at a valuation of $10 billion, said reports.

Last month, Flipkart acquired two startups, including AR startup Scapic and gaming startup Mech Mocha. Both acquisitions were in an undisclosed amount.

At present, Flipkart aims to strengthen its growth and democratizing commerce in India through technology, said Flipkart spokesperson.

Flipkart currently competes with Amazon India and Reliance Industries owned JioMart, which has recently joined the e-commerce business to challenge its rivals in the online space.

The platform is currently available in 5 different languages, including English, Hindi, Kannada, Tamil, and Telugu. While Amazon India currently supports Hindi and English.

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