Walmart Buys Out Tiger Global’s Stake In Flipkart For $1.4 Bn

Walmart has bought further shares of ecommerce giant Flipkart, reportedly picking up Tiger Global Management’s shares for $1.4 Bn and giving the hedge fund an exit from the company.

Tiger Global, having cashed most of its Flipkart shares earlier, made a gain of $3.5 Bn on an investment of $1.2 Bn, the hedge fund told investors, according to a person familiar with the matter cited by TechCrunch.

The transaction saw Flipkart’s valuation rise to $38 Bn, from nearly $35 Bn during the previous secondary sale, the Wall Street Journal reported. 

The development comes after it was reported widely earlier this year that Tiger Global and Accel were looking to sell their remaining stake in the company to Walmart. The two investors collectively hold a 5% stake in the Indian ecommerce giant, per media reports from January. 

The two investors were said to be in talks to sell their stake for $1.5 Bn each.

Walmart acquired a majority stake in Flipkart for about $18 Bn in 2018, but the subsequent separation of PhonePe from Flipkart and secondary share sales led to its stake falling. The transaction would raise Walmart’s stake in Flipkart to 72% if it goes through.

The purchase of Tiger Global’s stake in Flipkart comes as Walmart has been spending big on two of its crown jewels in India.

Walmart’s Big Bet On India Inc

Last year, Walmart spent nearly $1 Bn to bring PhonePe to Indian shores again, before the fintech behemoth’s public listing in 2024. This year, the US-based retailer has already injected $200 Mn in PhonePe as part of the latter’s ongoing $1 Bn fundraise.

The ongoing split between Flipkart and PhonePe has also seen the ecommerce giant initiate a $700 Mn payout to its employees as share value changed after the separation was finalised. 

Add to that, the $1.4 Bn Walmart has spent in buying back Tiger Global’s shares, and the US-based retailer’s total spending since September 2022 exceeds $3 Bn.

Earlier this year, Walmart’s chief financial officer (CFO), John David Rainey, said that Flipkart and PhonePe have the potential to become $100 Bn businesses. “It is not crazy to think that both those businesses could be $100 Bn businesses in the future,” said Rainey during an investor conference.

Meanwhile, losses continue to plague the two players. While PhonePe’s net losses surged 16.4% year-on-year (YoY) to INR 2,013.7 Cr in FY22, Flipkart’s marketplace arm raked up losses to the tune of INR 4,361 Cr in FY22, up 1.5X over the previous year.