In an aggressive push to take on Amazon in India and worldwide, Walmart Inc. is eyeing a large stake in the domestic e-commerce major Flipkart, Times of India reported citing unidentified sources. American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores has an offer to double the valuation of the Indian e-commerce company to nearly $20 billion by buying its various early shareholders, the Times of India report added. In September 2016 also, Reuters reported Walmart was in talks to buy a minority stake in Flipkart. Japan’s SoftBank last year infused $100 billion in Bangalore based e-tailer via its Vision Fund. SoftBank, the ;largest shareholder in Flipkart holds 23.6 percent stake. Tiger Global follows with 20.5 percent and Naspers with 13 percent respectively. Flipkart founders Binny and Sachin Bansal hold nearly 10 percent in the company. The global brick and mortar behemoth is mulling over a plan to invest between $5-10 billion to acquire a large stake, the Times of India report said.
A report in Economic Times earlier in February this year had reported about the continuing discussions between both companies on the same matter. Post SoftBank’s infusion of $100 billion last year, Flipkart had reported that the deal takes its cash reserves to over $4 billion. The Softbank investment added to the $1.4 billion that Flipkart raised earlier March this year from EBay, Microsoft and Tencent in this round of funding.
Earlier in 2017, other domestic e-commerce major had opted out of the merger talks with the Flipkart reasoning out that it plans to pursue an independent path. In June 2017, Flipkart hadd offer $1.1 billion deal to Snapdeal. The management of Snapdeal believed that Flipkart should add $150-200 million for subsidiaries Vulcan and Unicommerce to the then valuation of $1.1 billion. In the entire merger deal. However, valuation had always been the bone of contention in the merger talks, various media reports had stated time and again. Nevertheless, in the revised offer, Flipkart offered just $950 million, which resulted in Snapdeal walking away from the deal. It is widely believed that domestic e-commerce majors have realised that foreign investments are needed to achieve growth prospects in an increasingly competitive market post arrival of Amazon.