Even as half a dozen Indian startups are looking at an initial public offering (IPO), Walmart-owned Flipkart will bide its time and the US retail giant is not assigning a specific timeline to the public listing.
“From the day we made the acquisition or the investment, we made it clear we would be open to an IPO. “We will do it (Flipkart IPO) when it’s time for the business, it’s not an output, it’s not a target for us to do that,” Walmart International President Judith McKenna said at an industry conference recently.
“If we build a strong business, and we continue to do the things that we need to do to ensure long-term and sustainable growth, that is a possible route that we would consider in the future, but certainly no specific timeline on that,” she added.
Ahead of a potential IPO, Flipkart is reported to be in talks to raise $3 Bn from investors including SoftBank and several sovereign wealth funds. The Bengaluru-based ecommerce giant is targeting a valuation of $40 Bn with this round and is in discussions with Singapore’s GIC, the Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority. After exiting Flipkart in 2018, Japanese conglomerate SoftBank is in talks to invest $700 Mn in the ecommerce marketplace.
In 2018, Walmart had acquired Flipkart for $16 Bn, valuing the Bengaluru-based company at $21 Bn. At that time, Doug McMillion, president and CEO of Walmart, said that Flipkart will go public within four years of closing the deal.
Reports last year suggested that Flipkart may go public as early as 2022 at a valuation of $45Bn-$50 Bn. The ecommerce giant was said to be looking at an overseas IPO, either in the US or Singapore. Flipkart was also said to be looking at the special purpose acquisition company (SPAC) route to getting listed in the US.
In recent months, startups such as Zomato, Paytm, CarTrade and others have declared their IPO ambitions. Food aggregator business Zomato and automobile classified company CarTrade have already filed the draft red herring prospectus (DRHP) for their IPOs this year. Beyond this, epharmacy startup PharmEasy, beauty ecommerce brand Nykaa and insurtech startup PolicyBazaar will also be filling their papers this year. Paytm is planning India’s largest public market debut with its $3 Bn IPO.
Flipkart Sees Strong Growth In 2021: Walmart
Flipkart and its payments subsidiary PhonePe continued to experience “strong growth” in Q1 FY22, Walmart said last month. “In India for the first quarter, Flipkart and PhonePe continued to experience strong growth as annualized total payment value run rate at PhonePe grew by more than 150% versus last year. At Flipkart monthly active customers and users are key metrics and we’re performing well,” said Walmart chief McMillon.
The company said, Flipkart continued to perform well driving strong and sustainable ecommerce gross merchandise value (GMV) growth even as the teams dealt with the challenges of resurging Covid cases in India.
The Walmart International president added this week that among other categories, grocery was accelerated through Covid. “If there’s one area that I think we will see a greater acceleration in is grocery for India. That’s why we are really thinking about that as well,” she added.
As per McKenna, the current big focus for Flipkart is on categories that are driving profitability, including fashion. “Fashion really helps their margin mix and their contribution margin. They are also doing a really nice job of building out our ad tech business there too. And I think what we have seen there is strong growth in the connectivity that gives them.”