American retail giant Walmart wants to buy more than just a minority stake in Flipkart. It is reportedly looking at picking up a large stake in the ecommerce major and might even consider a buyout. And this could value Flipkart anywhere between $20 billion-23 billion, reports Mint.
This valuation includes Flipkart’s fashion businesses Myntra and Jabong, eBay India and mobile payments firm PhonePe.
However, Mint reports that a buyout is unlikely as Flipkart’s major investor SoftBank is against the deal as it wants to be a long-term investor in Flipkart and doesn’t want to cash out so early.
SoftBank invested in Flipkart in August 2017 and committed $1.4 billion in fresh capital through its Vision Fund, becoming its largest shareholder. However, if the deal with Walmart goes through, it is likely to make Walmart the largest shareholder in Flipkart.
While the talks are still in initial stages, Walmart is likely to buy shares from existing investors Accel Partners and Naspers, apart from infusing fresh capital into the ecommerce major.
Mint also reports that apart from Walmart, Google too, has shown interest in investing in Flipkart at a valuation of $15-$16 billion. Flipkart is reportedly talking to other investors as well.
ET reported on January 31 that Walmart was eyeing 15-20% stake in Flipkart. Walmart and Google had previously held funding talks with Flipkart in late 2016 but those discussions didn’t lead to deals.
Launched in 2007, Flipkart is currently the largest ecommerce player in India and has raised over $6 billion in funding since inception.
Flipkart has been competing aggressively with its largest rival Amazon in India. While it holds the market leadership position, rival Amazon too has been growing its presence in the country. In fact, Amazon India nearly doubled its authorized capital to Rs 31,000 crore ($4.74 billion) to take on Flipkart.