Days after the government has allowed ecommerce delivery of non-essentials, Walmart-owned Flipkart has received a fresh cash infusion from Singapore-based holding entities.
According to ministry of corporate affairs filings accessed by Inc42, Flipkart Internet Private Limited has issued fresh equity shares to Singapore-based Flipkart Marketplace Private Limited and Flipkart Private Limited. The 3,14,289 shares have been issued at a face value of INR 1 with a premium of INR 21,476 worth INR 679.99 Cr ($89.2 Mn).
The infusion comes after Flipkart Internet received INR 592.8 Cr in infusion from Flipkart Marketplace on April 15 by issuing 2,76,023 shares at a nominal value of INR 1 with a premium of INR 21,476 per share.
The last infusion came when its operational revenue sources had come to a standstill due to the nationwide lockdown, which barred the delivery of non-essentials. The infusion was to help the company stay afloat in hard times.
However, in the fourth phase of lockdown from May 18, the government allowed ecommerce delivery of non-essentials, which has put Flipkart back in business. A Flipkart spokesperson had said that it will await the advisories from different states. “We will continue to work in accordance with the directives from the government and local authorities while serving customers, sellers through our safe supply chain,” a Flipkart Group spokesperson said.
“At the Flipkart Group, our supply chain team continues to play a critical role in helping consumers with all their requirements, as they maintain social distancing and prefer to stay indoors,” the spokesperson said.
The spokesperson added that the company is working with lakhs of MSMEs and sellers across India to provide them with constant counsel and help with their business readiness, and is following safety and health procedures at its facilities and for supply chain and delivery staff.
The curbs on delivery of non-essential items in select zones till May 18 as part of the nationwide lockdown, which “negatively” impacted Flipkart’s ecommerce operations, also hurt the growth of its owener, US-based retailer Walmart. “Limited operations of the company’s Flipkart business in India for a portion of the quarter negatively affected growth,” Walmart said.
In the previous quarter, Flipkart also had over one billion visitors every month. Walmart also noted that the ecommerce company had registered a 45% hike in its monthly active customers last year and a 30% increase in the transactions per customer.
A LocalCircles survey recently said that the demand for non-essentials could be short-lived as a majority of consumers would refrain from spending on non-essential items. The survey showed that 74% of the respondents would not spend on anything apart from essentials even after restrictions are relaxed.