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.
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