Walmart has recently announced a USD 10 billion Flipkart IPO which will conclude the company’s valuation at USD 40 billion.
Yes! If the IPO goes successfully, Flipkart will reach a valuation of $40 billion, doubling Walmart’s investment in Flipkart which was USD 16 billion, back in 2018.
According to reports, Walmart promised during the acquisition that it will make Flipkart public with the next four years since 2018. Thus, keeping the promise, this could soon be true. The multinational retail company has reportedly agreed to toss-in $10 billion Flipkart Initial Public Offering (IPO) in the United States.
When dealing with an IPO, it is mandatory to partner-up with a banking institution and Walmart joined hands with the American multinational investment bank, Goldman Sachs to go through with this Flipkart’s IPO.
Walmart acquired about 77% stakes of Flipkart during acquisition, back in 2018 and today, in 2020, the company holds about 82.3% stake in the Indian e-commerce platform. The leftover percentage is divided amongst Flipkart’s existing investors such as Accel Partners, Microsoft, Tiger Global and China’s Tencent.
However, as we all are aware of the unfortunate COVID-19 situation, several jobs were lost, many shutters got permanently closed and established businesses were also taken aback by losses. At the beginning of the COVID-19 induced lockdowns, it was almost certain that Walmart’s plan to take Flipkart public will be delayed by at least two years, but the company broke out of this mess during its festive season.
It is almost impossible to believe that Flipkart recorded a 10x increase in sales during its festive season. According to analysts, this was the result of people sitting in the comfort of their houses and shopping online as it is much safer in these trying times than going to brick and mortar stores and risking the possibility of getting infected by the Corona Virus.
Flipkart is on the move this year, first, it acquired Walmart India’s operations, then went ahead in search for expanding its operations into social gaming and Augmented Reality sector, found Mech Mocha and Scapic, acquired them both.
As reported by Business Insider, Flipkart has also made certain investments in the fashion retail business, including USPL, Arvind Fashions and Aditya Birla Fashion Retail.
In order to compete with the cut-throat competition in the Indian e-commerce sector which majorly comes from Amazon and Reliance retail, Flipkart went ahead and invested in certain mom and pop stores (Kirana stores) as well. Reports reveal that these Kiranas delivered more than 3 million orders during the company’s Big Billion Days Sale where every second, over 100 orders were made.