U.S.-based multinational retail corporation Walmart Inc. is reportedly gearing up for an initial public offering (IPO) of USD 10 billion for Indian e-commerce company Flipkart.  The company has appointed American multinational investment bank and financial services firm Goldman Sachs Group, Inc. as its financial advisor.

It is to be noted that Walmart had initially acquired a 77% stake in Flipkart for USD 16 billion in the year 2018. Flipkart then raised USD 1.2 billion in a fresh funding round and reached a valuation of USD 24.9 billion, with Walmart being the lead investor. The other participants in the funding round were Microsoft Corporation, Accel, Tencent Holdings Ltd., and Tiger Management Corp.

The American retail giant currently owns 82.3% stake in Flipkart. Sources confirmed that the upcoming IPO is anticipated to double Flipkart’s valuation to around USD 40 billion.

Sources aware of the development claimed that Walmart is planning on selling around 25% of its shares in Flipkart. It is also worth mentioning that if the IPO plan is successful, it will be the largest to be conducted by an Indian organization in an overseas exchange.

A Flipkart spokesperson was reported saying that although the IPO has been a part of the company’s long-term business strategy, it is currently focusing on expanding and democratizing Indian e-commerce by using advanced technologies while parallelly widening its customer base.

For the uninitiated, Flipkart is a Bangalore-headquartered e-commerce retail company that offers an online shopping platform with a wide range of consumer products including home appliances, consumer electronics, clothes, footwear, and jewelry among others.

The recent IPO will also offer funding opportunities to minor investors to pare or sell their holdings, sources claimed. In fact, Flipkart’s payment unit PhonePe which is likely to break even by the year 2022, is also planning to go public in 2023.

Reportedly, PhonePe rivals Amazon Pay, Google Pay as well as Paytm, and is expected to list on the U.S. stock exchange at a valuation of around USD 10 billion.

Source credits:

https://www.livemint.com/market/ipo/walmart-readies-for-10-bn-flipkart-ipo-11607300769974.html