Indian e-tailer major Flipkart completed another round of buyback of its shares valued at $350 million (Rs 2,275 crore) from its investors, according to its regulatory filing on Thursday.
The Chennai-based business intelligence platform Paper.vc, which sourced the filing from the Singapore's Accounting and Corporate Regulatory Authority (ACRA), said Flipkart had bought over 18 lakh preferential shares from its institutional investors like Tiger Global, Accel and Naspers.
"The buyback will enable the e-commerce giant to bargain for a favourable deal with the US-based retail behemoth Walmart, which is eyeing a majority or controlling equity stake in it to foray into the multi-billion dollar Indian retail space," a market analyst told IANS.
The buyback also paves way for the Singapore-registered Flipkart to become a private entity and sell its stake to bidders like Walmart at higher value.
"The company's valuation is estimated to be $18 billion, which is based on the buyback price paid to investors, including premium," added the analyst.
Interestingly, earlier this week, Flipkart’s biggest rival in India Amazon also made a formal offer to buy 60% stake in the ecommerce major. According to a CNBC TV18 report, Amazon reportedly offered a breakup fee of $2 billion.
However, Flipkart and its co-founders are said to be in favour of the Walmart deal. Economic Times has also reported on Friday that Flipkart’s co-founder and Executive Chairman Sachin Bansal may exit the company if the deal with Walmart. Post his exit, he might look to either start a new company, while also mentoring other startups.
The report states that Binny Bansal is likely to sell about a tenth of his shares in Flipkart. However, it is not known how much Sachin Bansal, who currently holds 5.5% stake, will sell.
The decade-old company had raised a whopping $6.11 billion till date since 2009 through 14 rounds of funding.
(With IANS inputs)