Flipkart is reportedly looking to list in US via a blank cheque firm
- Walmart-owned e-commerce giant
Flipkartis exploring an initial public offering (IPO) in the US through a merger with a special purpose acquisition company ( SPAC).
- SPAC companies are generally formed as “blank cheque” firms with the specific purpose to raise capital through a market debut to acquire another company.
- Indian renewable energy company ReNew Power had recently announced its merger with a similar SPAC, while according to reports grocery startup Grofers is exploring the same.
The listing in the US markets could give the online retailer a $35 billion valuation. Flipkart’s last reported valuation was $24.9 billion, when it received funding from
What is a SPAC?
SPAC companies are generally formed as “blank cheque” firms with the specific purpose to raise capital through a market debut to acquire another company.
When a deal is formed through SPAC, the companies have two years to complete the acquisition. If the deal fails to go through, the SPAC will have to return all money to the investors.
Through a SPAC deal, companies don’t have to go through the traditional paperwork hassles needed for an IPO.
The reason why a SPAC is better than an IPO is best described by Don Butler, managing director at venture capital fund Thomvest Ventures. “An IPO is basically a company looking for money, while a SPAC is money looking for a company,” he recently said.
There are many advantages of opting for a SPAC deal, first the company would get direct expertise from a company that has been in the business of taking firms to the public markets, and SPACS also acquires companies at a premium, giving more value to the initial investors in the company.
Flipkart isn’t alone
Flipkart, if the deal goes through, will join the long list of companies in the US that have successfully taken the SPAC route in the last year.
AdvertisementEven Indian companies -- like the renewable energy firm Renew Power -- have announced their merger with a blank cheque company for a listing in the US. In fact, Renew Power’s SPAC is being backed by the Sri Lankan-American investor Chamath Palihapitiya, who has played a major role in the SPAC boom in the US.
Excited to do the PIPE in ReNew Power as they merge with $RMGBRenew is India’s largest clean energy company with… https://t.co/4OHuaItQdh— Chamath Palihapitiya (@chamath) 1614177684000
Softbank-backed grocery startup Grofers is aso looking for a listing in the US through a SPAC, as reports suggest.
INTERVIEW: Bootstrapped online travel aggregator EaseMyTrip makes its way to the public markets
India's Supreme Court observes that OTT platforms are showing pornography and proposes screening of online content
This spam blocker may add a layer of anonymity to your social media presence while Twitter and Facebook are under pressure to verify their users
- If the COVID-19 vaccine prices are too high for some, then why not use direct benefit transfer
- The COVID-19 crisis in India is getting worse with state administrations trying to hoard oxygen
- On Earth Day, companies commit to adopt more sustainable practices in an attempt to safeguard our tomorrow
- Tiger Global makes its first crypto investment in India making Coinswitch Kuber worth half a billion dollars
- Best pulse oximeters to keep a check on your SpO2 readings