Walmart Inc managed Flipkart is planning for a primary public offering abroad in early 2021 that will take the value of the Indian E-Commerce firm to $50 billion.
Flipkart competes with Reliance Industries and Amazon India in the sector and will be striving for a valuation in the $45-$50 billion range as stated by a source with subject matter knowledge. It will be interesting to see as Walmart will double its investment or even more.
Flipkart is expected to decide among The U.S. and Singapore for the IPO (initial public offering) said sources. The firm is incorporated in Singapore and is listed where Walmart is based, in the United States, and could give it entrance to a wider pool of funds.
Both the firms are in denial regarding this as sources say it is an internal discussion and preparation for now but soon are going to get external advisers for the process.
It is in the news that India is drafting new regulations that will make overseas listing direct and easy for domestic companies. The practice has begun with compliance, finance and legal functions to meet the standards of a possible listing.
The initial public offering target was late 2021 or first half of 2022 but with the pandemic and economic crisis it is difficult to predict, says sources.
Walmart in 2018 acquired approximately 77% stake in Sachin Bansal and Binny Bansal’s Flipkart for nearly $16 billion. That contract endures the single most significant foreign direct investment ever in India. In 2018 Flipkart was the country’s most successful start-up which made the founders Sachin Bansal and Binny Bansal billionaires.
In the same year, Walmart, in a regulatory filing, stated it would take Flipkart public in the next four years.
In July 2020, It was able to get funding $1.2 billion along with Walmart as a lead investor.
Flipkart announced that it would manage the funding in developing its e-commerce marketplace during this crisis and two tranches this fiscal year.
As Indians have made the shift to online shopping, according to Goldman Sachs India’s e-commerce sector is assumed to be $99 billion by 2024.