Exploring Right Time For Flipkart IPO: Walmart International CEO

Exploring Right Time For Flipkart IPO: Walmart International CEO

SUMMARY

Looking and exploring the right time to IPO Flipkart, said Walmart International’s president and CEO Kath McLay

A senior Walmart executive said that Flipkart has been EBITDA positive for the last two quarters and has been witnessing strong growth

Flipkart’s B2C arm reported a net loss of INR 4,026 Cr, down 9% YoY, in FY23 while operating revenue zoomed 42% YoY to INR 14,845.8 Cr

Amid reports of flipkart mulling a public listing, a senior executive at parent Walmart has said that the company is exploring the “right time” for the ecommerce giant’s initial public offering (IPO).

“We’ve seen a growth in some premiumisation and that is, kind of, lifting the profile of the Flipkart business. And so it (Flipkart) is on track for the growth trajectory that we had them on. And we are looking and exploring when will be the right time to IPO that business,” Walmart International president and CEO Kath McLay said during the retail giant’s post-earnings call.

Walmart reported a profit of $5.1 Bn on a revenue of $161.51 Bn during its first quarter, which ended March 2024.

This is the first time that a senior Walmart executive has publicly stated the listing ambitions of Flipkart. 

In response to a question during the call, McLay said that Flipkart’s earnings before interest, tax, depreciation, and amortisation (EBITDA) has been positive for the last two quarters (Q4 2023 and Q1 2024). 

Meanwhile, Walmart CFO and executive vice president John David Rainey said that Flipkart clocked a double-digit revenue growth in Q1, adding that the ecommerce major led Walmart’s all other international markets in the marketplace segment. 

“Moving to Walmart International, we continue to deliver strong results with double-digit growth in sales and profit, lifting our company growth rates. Strength was broad-based, led by Walmex, China, and Flipkart. For (the) marketplace, within the international markets, all markets grew by double-digits, led by Flipkart and Walmex, reflecting the strength we’re experiencing across markets,” Rainey said. 

He added that same-day delivery orders in India grew by more than 150% in Q1 2024 as Flipkart expanded the offering across 20 major cities in the country.

Walmart International’s Kath McLay also said that both Flipkart and digital payments arm PhonePe are witnessing “strong” growth. He said the US-retail major is “excited” about the Indian market.

The latest statement about IPO plans comes days after a report said that Flipkart is internally mulling plans to shift the domicile of its parent entity to India from Singapore. With this, the ecommerce major plans to join fintech major Groww and sister firm PhonePe that have shifted back to India in the past two years. 

Even as investors line up for profitable ventures mulling IPO, Flipkart, one of the biggest names in the Indian startup world, continues to make losses. 

In FY23, Flipkart’s marketplace arm saw its operating revenue soar 42% year-on-year (YoY) to INR 14,845.8 Cr from INR 10,477.4 Cr in FY22. Meanwhile, the B2C arm’s net loss declined 9% to INR 4,026.5 Cr in FY23 from INR 4,419.5 Cr in FY22. 

On the other hand, PhonePe’s consolidated net loss rose 39% YoY to INR 2,795.3 Cr in FY23.

However, both players are industry leaders in their respective segments and account for a major chunk of market share in their spaces.

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