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Walmart's Flipkart Negotiating With Investors Including Softbank To Arise $3 Bln: Reports


06/07/2021


Walmart's Flipkart Negotiating With Investors Including Softbank To Arise $3 Bln: Reports
According to recent reports, the Indian e-commerce firm Flipkart, which is owned by the United States based retailer Walmart Inc, is currently negotiating with potential investors to raise at least $3 billion.
 
The reports highlighted that the potential investors that are being targeted include the Japanese investment conglomerate SoftBank Group Corp as well as a number of sovereign wealth funds.
 
The reports, citing sources with knowledge of the negotiations and the affairs of the company, also named Singapore's GIC Pte., Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority as the potential investors with whom the Indian startup is currently negotiating as the company aims to attain a valuation of about $40 billion.
 
The report suggested that an investment of between $300 million to $500 million in Flipkart could be made by Japan’s SoftBank through its Vision Fund II.
 
There were however no comments on the issue from Flipkart, SoftBank and the Abu Dhabi Investment Authority.
 
In 2018, about 20 per cent of its stake in the Indian e-commerce firm was sold by SoftBank to Walmart.
 
According to a report published by the news agency Reuters in March, the Indian company is in the early stages of exploring going public in the United States through a deal with a blank-check firm. Other reports in September this year suggested that the Bengaluru-based Flipkart was getting ready to go public overseas as early as 2021, which could value the firm at as much as $50 billion.
 
According to a report published by Bloomberg, the intention of the negotiations being held by Flipkart is to get a higher valuation and amass additional capital prior to its planned initial public offering sometime next year. The report quoted sources saying that the company had initially targeted launching the IPO as soon as the fourth quarter of the current year, but was forced to delay the plans because of the resurgence of the Covid-19 pandemic in India.  
 
One of the clear benefiters of the Covid-19 pandemic have been the e-commerce companies as online purchasing has increased significantly since the last 18 months of the pandemic. During that period, the market capitalization of Amazon.com Inc., which is a close competitor of Flipkart in India, increased to $1.6 trillion as its stocks rose by as much as 70 per cent. And the IPO launched by South Korea’s Coupang Inc has been one of the most successful IPOs this year. This e-commerce firm is supported by another e-commerce provider that is backed by Japan’s SoftBank.
 
According to analysts, the pandemic period has shown the immense potential for e-commerce growth in the Indian market. There is rapid digitization among the population of 1.3 billion of India with rising standards of living and with the traditional retailers not enjoying a standing as in some of the more developed markets as the United States.
 
This has increased interests of investors in Flipkart, which was founded in 2007 by two former Amazon engineers and was acquired by Walmart 11 years later in the American retailer’s largest acquisition ever.
 
(Source:www.economictimes.com & www.bloomberg.com)