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Flipkart Contemplates $5B IPO via Wall Street In The Next 18 Months

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In 2014, the Chinese e-giant Alibaba hit the Wall Street creating a world record in raising $25 billion. Now it’s time for us, says the Indian e-commerce giant, Flipkart. The news is Sachin and Binny Bansal are meeting many investment bankers from the US to help them raise atleast $5 billion through an IPO (Initial Public Offering). We sure know the valuations for the fund raising have started. Investment banking and financial advisory companies such as Morgan Stanley, Goldman Sachs, Citigroup, Deutsche Bank have been approached to help assist the company in raising funds by listing in the New York Stock Exchange.

The company is planning to raise the funds sometime within next 18 months.

Flipkart-Funding

In 2010, Coal India set the record of overseas fund raising by Indian companies at $3.4 billion and now if the valuations of the company come out right, and also the investors seem bullish about the e-commerce industry in India, Flipkart’s listing would be the highest grosser in the history for the Indian companies. Tiger Global Management LLC is the largest investor for Flipkart and Tiger’s listing in the NYSE market has smoothened the process of penetrating into foreign money markets, many say.

In December 2014, Flipkart raised their latest round of $700 million funding that included new investors like Baillie Gifford, Greenoaks Capital, T. Rowe Price Associates, Qatar Investment Authority and previous investors like DST Global, ICONIQ Capital, Tiger Global and Steadview Capital!

Funds Raised By Flipkart Till Date

Round Who Funded Date Amount
First Round Accel India 2009 USD 1 Million
Second Round Tiger Global 2010 USD 10 Million
Third Round Tiger Global June 2011 USD 20 Million
Fourth Round Naspers / ICONIQ Capital August 2012 USD 150 Million
Fifth Round Naspers, Accel Partners, Tiger Global, and ICONIQ Capital July 2013 USD 200 Million
Sixth Round Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina and Vulcan Capital, Tiger Global Oct 2013 USD 160 Million
Seventh Round DST Global May 2014 USD 210 Million
Eighth Round Tiger Global, DST Global, Accel Partners (plus other new investors) July 2014 USD 1000 Million
Ninth Round Steadview Capital, Baillie Gifford, Greenoaks Capital, T. Rowe Price Associates, Qatar Investment Authority, DST Global, GIC, ICONIQ Capital, Tiger Global. December 2014 USD 700 Million
Total USD 2451 Million

 

Flipkart however got incorporated in Singapore as per the rules there but didn’t prefer an IPO there. Last year saw most of it’s rivals raise big chunks of money, like Snapdeal raising $627 million and Amazon committing $2 billion for their Indian operations.

The company valuation sought by Flipkart is in all probability more than $11 billion (their estimated current valuation). Flipkart has not yet decided on the investment banker but sources say that feasibility studies are being churned out.

Indian companies’ IPO on NASDAQ and NYSE since 1999

Company Name Symbol Industry Type
HDFC Bank HDB Banking
ICICI Bank IBN Banking
Infosys Technologies INFY IT Services
Mahanagar Telephone Nigam MTE Telecommunications
Rediff.com REDF Information Provider
Dr. Reddy’s Laboratories RDY Pharmaceutical Products
Satyam Computer Services SAY Information Services
Sify Limited SIFY Internet Provider
Tata Motors TTM Automative Vehicles
Videsh Sanchar Nigam Limited VSL Telecommunications
Wipro Limited WIT IT Services

But however none of these have raised funds from the US stock markets. It’s interesting to see the Indian e-commerce giant go for the US IPO. Though many are contemplating the Flipkart’s decision, the bankers are however most happy.

When Alibaba went for the IPO last year, the investment bankers seem to have charged $300 million for the financial services! Though it surely is a bold move, we are yet to see if Flipkart will eventually raise the desired funds or regret the move. But surely it will set a record for the Indian IPO seeking companies.

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