Walmart Plans Flipkart’s Mega IPO Worth Rs 74,000 Crore! Will Sell 25% Of Flipkart Via Open Share Sale

• Walmart plans to sell 25% of the Flipkart’s shares.
• The Indian e-commerce retailer will raise $10 billion through the IPO

While the COVID 19 has disrupted the world’s businesses, one of the very few sectors that have flourished is e-commerce. The drastic switch to online purchases has reflected on the dramatic growth of the online retail industry. The overall e-commerce sector has not just recovered but witnessed 17% growth as of the first half of 2020.

In this scenario, Indian ecommerce website Flipkart is planning to go public in the US to raise around $ 10 billion.

What is Walmart planning for Flipkart?

While Walmart acquired Flipkart for $16 billion in 2018 it pledged to take the indian e commerce giant public in four years.

Now that four years are completed the American multinational retailer is sticking to its plans and planning to raise around $10 million by selling 25% of the Flipkart’s shares, two anonymous people who are linked with the process said. 

“Work on the IPO (initial public offering) is in full swing and the advent of the pandemic has only hastened the process, given the spectacular surge in demand on e-commerce platforms,” one of them said.

Walmart has appointed an american investment bank, Goldman Sachs, to initiate the sale of Flipkart for public investors in the US.

Why is Flipkart going public?

Because of the sudden push towards online transactions because of pandemic, the ecommerce sector is flourishing. 

After postponing the prime day sale from July to October, Amazon has managed to hit estimated sales of 10.4 billion dollars, which is 45% more than the sales in the prime day 2019 that was 7.16 billion dollars despite the pandemic. 

While Amazon was always a threat for Flipkart, the rise of Reliance’s e commerce business JioMart isn’t going in the favour of the Indian online retailer.

What if Flipkart succeeds in its  IPO plans?  

Flipkart is likely to expand and take advantage of the exhilaration of ecommerce. It might become the largest Indian company on overseas exchange. After the new public investments, the company’s valuation will increase to $40 dollars.

Speaking about the recent developments, 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.”

Flipkart’s payment gateway Phonepe is also planning to go public by the year 2023. Phonepe is also targeting the overseas market and planning to enter the US through Walmart.

Flipkart has enlarged its customer base over the past few months and also tried to improve its last mile delivery. It has also introduced multiple local languages for the convenience of people who are not comfortable in English. 

The efforts put by Flipkart to establish itself as a strong e commerce entity are quite evident. It will be interesting to know how it will place itself in the market after going public.