Flipkart IPO on the cards? Here’s what Walmart’s company is looking at ahead of the big milestone

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December 07, 2020 1:52 PM

Walmart had stated in a US filing on May 9, 2018, that it may take Flipkart public in four years at a valuation no less than what it invested in Flipkart. Walmart had acquired 77 per cent of Flipkart for $16 billion to take on arch-rival Amazon.

Flipkart Grocery sets up warehouse in Lucknow, to create over 500 direct jobsFlipkart Group had acquired around 66 per cent share of the overall festive GMV this year. Image: Reuters

Walmart-owned Flipkart’s initial public offering (IPO) is a certain thing but how soon it would be on the horizon is a matter that has always kept the Indian startup ecosystem and its stakeholders on tenterhooks. After all, Flipkart has been the e-commerce poster boy in India’s journey towards digitisation of at least its consumer-facing services. Talks around Flipkart’s IPO have been happening for the past few years in the backdrop of different developments at the company even as it counts the listing event as part of its long-term strategy. “An initial public offering has always been part of Flipkart’s long-term strategy. However, the focus at present is on growth and democratising commerce in India through technology, while continuing to unlock customer value, Walmart-owned e-commerce company told Financial Express Online in a statement.

“The biggest areas of investment for Flipkart will continue to be in technology, operations, and new capabilities,” it added. Flipkart has reiterated its focus in the statement from last year when media reports about its possible 2022 listing in the US had surfaced. The latest statement came amid business newspaper Mint’s report on Flipkart hiring Goldman Sachs to explore an IPO in the US to raise around $10 billion citing people aware of the matter. Walmart, itself, had stated in a May 9, 2018 filing with the US Securities and Exchange Commission that it may take Flipkart public in four years (around 2022) at a valuation no less than what it invested in Flipkart. Walmart had acquired 77 per cent of Flipkart for $16 billion to take on arch-rival Amazon.

Earlier this year, Walmart’s Chief Financial Officer Brett Biggs speaking at the UBS Global Consumer & Retail Conference in March had said in response to a question that “Yes, we’ve talked about longer-term that IPO is a potential for that business. I can tell you, it runs pretty independently right now and that’s when you buy a business like that, that’s what you want it to do.”

Also read: Paytm Japan: Vijay Shekhar Sharma’s PayPay is now country’s 5th leading app as user base grows 150% YoY

Flipkart had driven the international net sales for Walmart’s Q3 ended in October 2021. “Strong growth in net sales at Flipkart was helped by a record number of monthly active customers,” Walmart had said last month announcing the quarterly results. Its net sales went up 1.3 per cent year-on-year to $29.6 billion in the August-October period. During the recent festive month of mid-October to mid-November 2020, Flipkart Group, including PhonePe and Myntra, had emerged as the top e-commerce marketplace with around 66 per cent share of the overall gross merchandise value (GMV) worth $8.3 billion, according to a RedSeer report. Jeff Bezos Amazon’s India business, on the other hand, had cornered 34 per cent share. The festive month saw overall online sales up 65 per cent from the year-ago sales worth $5 billion.

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