Walmart-owned Flipkart, the Indian e-commerce giant, is reportedly eyeing a 2021 overseas listing and hoping for a $50 billion valuation
- E-commerce firm Flipkart is preparing for an an initial public offering overseas – and is hoping for a valuation of up to $50 billion, sources told Reuters.
- Walmart bought a roughly 77% stake in Flipkart for about $16 billion back in 2018. This remains the single-largest foreign direct investment in an Indian company.
- At the $50 billion valuation that sources say Flipkart is hoping for, Walmart would more than double its investment.
- India's e-commerce sector is booming. Flipkart competes with Amazon India and Jiomart, which is owned by India's biggest company, Reliance Industries.
Walmart-controlled Indian e-commerce giant Flipkart is preparing for an initial public offering overseas as early as 2021 that could value the firm at $50 billion, Reuters reported.
Flipkart will be aiming for a valuation in the $45 billion to $50 billion range, according to one source with knowledge of the matter.
If achieved, that would mean Walmart more than doubles its 2018 investment in the company. It paid about $16 billion for roughly 77% stake — this remains the single-largest foreign direct investment in an Indian company.
Flipkart is likely to choose either Singapore, where the company is incorporated, or the US, where parent Walmart is based, for its IPO, said two other sources, who asked not to be named.
Flipkart and Walmart did not respond to Reuters' requests for comment.
The sources said the preparations and discussions have been largely internal for now, but the company is preparing to consult external advisers soon.
Two other sources familiar with the plans said that work has begun to meet compliance, legal, and finance standards ahead of a potential listing.
One of the sources said the company expects to launch the IPO in late 2021 or early 2022, but the pandemic has made this uncertain. The second person added that top-level internal meetings regularly refer to being "IPO ready."
India's e-commerce boom
In July, Flipkart raised $1.2 billion in fresh funding with Walmart as its lead investor. That round valued Flipkart at $24.9 billion.
China's Tencent, US hedge fund Tiger Global, and Microsoft invested in Flipkart as part of a $1.4 billion funding round in 2017.
India's booming e-commerce sector is expected to be worth $99 billion by 2024, according to Goldman Sachs. In May 2020, India's largest company Reliance Industries launched grocery delivery service JioMart, which is growing rapidly and delivering more than 250,000 orders per day, according to CNBC TV18.
Flipkart competes with both JioMart and Amazon, which has reportedly been offered a 40% stake in Reliance Industry's retail arm, which includes JioMart, for $20 billion.
Flipkart is tapping into the demand for online shopping, which has soared during the pandemic, by creating 70,000 new jobs for its "Big Billion Days" sales.
"Big Billion Days" is similar to Amazon's Prime Day, and rakes in the company's biggest sales for the year. The sale lasts four or five days and usually starts around October during India's festive season, which ends with Diwali.
The company said on Tuesday it would also sign up more than 50,000 kiranas, or small grocery stores, for last-mile delivery.