Walmart says Flipkart may launch an IPO in the long-term

walmart acquired flipkart may launch its ipo

Indian eCommerce giant Flipkart, now acquired by Walmart may soon be on the verge of filing an IPO(Initial Public Offering). Addressing the UBS Global Consumer & Retail Conference, Walmart’s CFO Brett Biggs said that Flipkart has the potential to launch an IPO in the long-term. “Yes, we’ve talked about longer-term that IPO is a potential for that business. I can tell you, it runs pretty independently right now and that’s when you buy a business like that, that’s what you want it to do,” he added.

Flipkart was founded in 2007 by ex-employees of Amazon, Sachin Bansal, and Binny Bansal. After its huge success in India, Walmart acquired a 77% stake in the company in May 2018 for $16 Billion. Soon after this, last year it bought more stakes from investors like Binny Bansal, Tencent, Microsoft, Tiger Global,Softbank,eBay, Naspers, and few others. Now Walmart has 81.3% stakes in Flipkart, which also owns few major subsidiaries in India, including, PhonePe, Jabong, Myntra, 2GUD and Ekart.

Flipkart group’s first financial filing post-acquisition by Walmart shows the group’s total revenues increased 42.32% year-on-year to Rs 43,615.5 Crore on a consolidated basis in the year to March 2019. Losses, although elevated, dipped by 63.2% year-on-year to Rs 17,231.5 Crore.

The losses are diminishing and this is a good sign for Walmart. Also, Flipkart and Amazon jointly hold 80 percent of India’s e-commerce sector, according to analysts.Walmart had also said that Flipkart has over a billion visitors a month. Moreover, its active customers have been growing by 45% in the last year. Transactions per customer are also increasing by 30%, according to the retail giant.

Walmart sees the potential of Flipkart rising in upcoming years and hence launching IPO will be one of the safest options.