According to RoC filings, Axis Bank has extended about $58.7 Mn (INR 375 Cr) working capital credit line to Flipkart India Pvt. Ltd.
The filings also show that the company had previously availed $101.7 Mn (INR 650 Cr) from Kotak Mahindra Bank, a loan that was increased to $128.3 Mn (INR 820 Cr). It had also secured about $47 Mn (INR 300 Cr) credit line from HDFC Bank, which was increased to about $70.8 Mn (INR 453 Cr).
The credit from Axis Bank was extended in March 2017, but the company entered into an agreement last month.
A credit line is a pool of money available for borrowing. It is a flexible loan to maintain cash flow and is majorly utilised to meet the working capital needs of a business.
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Queries sent to Flipkart awaited a response at the time of publication.
Earlier, Flipkart India and Flipkart Internet together had pledged assets worth $219 Mn (INR 1,400 Cr) to two commercial banks viz. Deutsche Bank and Kotak Mahindra Bank.
In April 2017, Flipkart raised $1.4 Bn from funding from Tencent, Microsoft and eBay. Valued at $11.6 Bn, the company has a cash burn rate of $60-$65 Mn per month. To thwart competition from rival Amazon, Flipkart has been aggressively offering discounts and cashbacks to customers. This has, in turn, caused its burn rate to skyrocket in the last two years.
The company is currently recovering from the fallout of its merger deal with Snapdeal. However, just yesterday it was reported that SoftBank founder Masayoshi Son said that the Tokyo-headquartered conglomerate is still “engaged” with homegrown ecommerce firm Flipkart.
The Japanese conglomerate was in talks to invest between $1.5-$2 Bn. Earlier in July 2017, Inc42 also reported that the Bengaluru-based ecommerce firm is looking to raise $500 Mn funding from SoftBank as a primary fund.
The recent credit line from Axis Bank will surely provide breathing room to the homegrown ecommerce firm. It will also help Flipkart to maintain smooth cash flow during the festive season.
(The development was reported by VCCircle)