Walmart’s Indian e-commerce company Flipkart has raised its IPO (initial public offering) valuation target by about a third to $ 60-70 billion (approximately Rs 456051.3 crore to Rs 532003.85 crore), and now plans to list it in the US in 2023 This year, two sources with direct knowledge of the plan told Reuters.
Flipkart, which competes with Amazon in India’s growing e-commerce space, had earlier set an IPO valuation target of 50 50 billion (approximately Rs 380002.75 crore), Reuters reported.
The main reason for waiting for the IPO is to further increase the valuation due to Flipkart’s internal plans to focus on its two relatively new business-online healthcare services and travel bookings, two sources with direct knowledge said.
Two separate sources familiar with Flipkart’s plan said that the ongoing global market instability due to the Russia-Ukraine crisis has forced the Indian company to reconsider its timeline.
In 2021 Flipkart acquired Indian travel booking website Cleartrip and this week launched a “Health +” app to offer medicines as well as other healthcare products and services.
“Flipkart thinks there is a bigger rise in valuation than the original idea … the travel business is already starting to show great signs for them,” the first source said.
The first source said that the IPO valuation target could be $ 70 billion, while the second said that it could be $ 60 to $ 65 billion (approximately Rs 456051.3 crore to Rs 494003.575 crore). Flipkart did not respond to a request for comment.
Asked about the IPO timeline, Walmart CFO Brett Biggs told an analyst conference in December that Flipkart’s business was “performing almost exactly like ours” and that an “IPO was still on the card”, without specifying when the company would list.
According to sources, the list is now being planned from early to mid-2023. Flipkart has been incorporated in Singapore and wants to be listed in the US, they added.
The IPO plan comes amid growing protests from Indian brick-and-mortar retailers that Flipkart and Amazon are bypassing federal regulations and favoring selected vendors, allegations the companies deny. India is also working on a number of rules in the e-commerce sector that could intimidate foreign giants. Walmart acquired a roughly 77 percent stake in Flipkart in 2018 for about $ 16 billion (approximately Rs. 1,215.62 crore) – the largest deal ever – and said later that year that it could take the company to the public in four years.
Just last year, Flipkart raised $ 3.6 billion (approximately Rs. 27351.45 crore) in a fund round, valued at $ 37.6 billion (approximately Rs. 285670.7 crore).
This fundraising helped strengthen the company’s financial position and it now had enough cash to expand, meaning an IPO was not a requirement at this stage, a source said.
India’s IPO market has slowed after emerging as an enthusiastic retail investor and pushing easy money epidemic-induced flood prices to record highs, prompting Indian technology companies like Paytm and Zomato to go public.
More than 60 companies entered their market in India in 2021 and raised a total of $ 13.7 billion (approximately Rs. 104086.435 crore), which was higher than the combined three years ago.
Thomson Reuters 2022