US-based Walmart has reportedly brought in Goldman Sachs to raise around $10 Bn through an initial share sale of its Flipkart unit.
This comes after Flipkart said that it may go public as early as next year at a valuation of $45 – $50 Bn. The ecommerce giant would look at an overseas listing, either in the US, where its parent Walmart is based, or another country.
Walmart is planning to sell around 25% in India’s largest online retailer, people aware of the matter told Mint.
“Work on the IPO (initial public offering) is on in full swing and the advent of the pandemic has only hastened the process, given the spectacular surge in demand on e-commerce platforms,” said one of the two people cited above.
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.
A Flipkart spokesperson said, “An IPO has always been part of Flipkart’s long-term strategy. However, the focus at present is on growth and democratizing commerce in India through technology, while continuing to unlock customer value.”
Meanwhile, Walmart-owned ecommerce company had reported a 12% growth in its revenues for the year ended March at INR 34,610 Cr, and at the same time cut its losses by 18% to INR 3,150 Cr.
Founded in 2007, the Flipkart Group includes Flipkart, digital payments platform PhonePe, fashion retailer Myntra, and a logistics and delivery service eKart.
Flipkart had raised a $1.2 Bn funding round in July led by its majority stakeholder Walmart along with other existing shareholders. This was one of the many fund infusions received by Flipkart since the nationwide lockdown was announced in India.
In May, Flipkart Internet Private Limited issued fresh equity shares to Singapore-based Flipkart Marketplace Private Limited and Flipkart Private Limited. The 3,14,289 shares were issued at a face value of INR 1 with a premium of INR 21,476 worth INR 679.99 Cr ($89.2 Mn).
Prior to this in April, Flipkart Internet had 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.