CCI Clears Google’s Stake Acquisition in Flipkart

The Competition Commission of India (CCI) has approved Google parent Alphabet’s stake acquisition in ecommerce major Flipkart. 

“Commission approves transaction involving subscription of shares of Flipkart Private Limited by Shoreline, an Alphabet, Inc. subsidiary,” the watchdog said in a statement. 

The proposed deal comprises the acquisition of a “minority, non-controlling investment” in Flipkart through subscription of shares. 

The competition watchdog further added that the transaction will encompass an arrangement between an affiliate of Google and a subsidiary of Flipkart for the “provision of additional cloud services”.

This comes six months after the ecommerce platform in May this year said that it added Google to its cap table as a minority investor as part of a larger round led by its parent and retail giant Walmart. 

At the time, Flipkart said that the deal would be contingent on regulatory approvals as well as terms that both parties need to agree upon. 

For the uninitiated, the infusion was part of a massive $1 Bn round that Flipkart raised earlier this year. While Walmart committed $600 Mn, Google is said to have reportedly contributed $350 Mn as part of the round. As per reports, the capital was raised at a 5%-10% premium to Flipkart’s last reported valuation of $33 Bn during the previous fundraise. 

It is also pertinent to note that Flipkart’s marketplace entity also received an infusion of INR 1,421 Cr from its Singapore parent in April 2024, which was preceded by another INR 924 Cr infusion earlier this year.

The approval comes at a time when Flipkart has been on an expansion spree. Earlier this year, it forayed into the quick commerce segment with the launch of ‘Flipkart Minutes’ and has plans to rapidly scale up the offering. 

Besides, the ecommerce giant has been diversifying its product mix. It bolstered its presence in the fintech space with the launch of super.money. 

However, the company has also been facing renewed regulatory scrutiny. In September this year, the CCI found Flipkart, along with Amazon, guilty of flouting antitrust rules by giving preference to certain sellers. 

Earlier this month, the Enforcement Directorate (ED) also raided multiple premises linked to Flipkart’s sellers across India in connection with a probe involving violations of foreign investment rules.

A day ago, a consumer court in Mumbai found the ecommerce major guilty of unfair trade practices for citing its ‘no return policy’ and refusing to replace an inferior-quality food product.

On top of that, Flipkart continues to be a loss-making entity. Its marketplace arm reported a net loss of INR 2,358 Cr in the financial year 2023-24 (FY24), down 41% year-on-year (YoY). However, operating revenue jumped 21% to INR 17,907.3 Cr in the fiscal under review from INR 14,845.8 Cr in FY23.