India: Flipkart May Go For Public Listing As Early As Next Year

Flipkart would look at an overseas listing, either in US, where Walmart is headquartered or another country, and could be valued at $40-45 billion.

In 2018, Walmart Inc. had acquired a majority stake in Flipkart for $16 billion, valuing Flipkart at $21 billion. Doug McMillion, president and CEO, Walmart had said that it may take Flipkart public in as early as four years after the acquisition was closed.

“The IPO should be done at no less a valuation than that at which Walmart invested in the Indian e-commerce firm,” Walmart had said in a regulatory filing.

“As per Walmart’s timeline, the IPO could be done by 2022. But the digital transformation in India, with customers increasingly moving online to shop, has been so rapid, that it has made Flipkart grow much faster. Therefore the IPO plan could also be fast-tracked. Flipkart would get the best valuation if the IPO happens in US,” the person said, who didn’t wish to be named.

A Flipkart spokesperson didn’t respond to queries.

In July, Walmart led a $1.2 billion investment in Flipkart Group, valuing the company at around $25 billion, in its largest fund-raising since its acquisition in 2018 .

In India, Flipkart competes with Amazon and Reliance Industries Ltd, which has been ramping up its e-commerce business with JioMart.

Digital transformation

Flipkart’s subsidiary, PhonePe, which the e-commerce major acquired in April, 2016 is also looking to turn profitable by 2022, and go public by 2023. Mint first reported on PhonePe’s IPO plans on 22 April.

The digital payments major which rivals firms such as Paytm Payments Bank, Google Pay and Amazon Pay is most likely to go public in US, and will seek a valuation of $10 billion on listing.

Recently, Flipkart as a part of its funding announcement from Walmart said that PhonePe is currently processing annualised total payments value (TPV) of $180 billion, and witnesses more than 500 million transactions monthly on its platform. It looks to exit 2020, with more than 275 million users on its platform. PhonePe has also set its sight on international geographies and may also look to take its payment solutions through Walmart Inc. to the North American market.

In the past few months alone, Flipkart has not only expanded its customer base and broad-based supply chain, but also reached out to more delivery pin codes even in smaller cities, and introduced multiple vernacular languages on its platform.

“The focus of Flipkart however is growth right now and the IPO timeline is not fixed yet. But the global guidance and Walmart’s acquisition was to always create the right processes and build the company to eventually take it public,” said a second person.

In July, Flipkart acquired the Indian operations of Walmart Inc. as its US parent consolidates its operations in this fast-growing retail market to compete with Reliance and Amazon, among others. Taking over Walmart India Pvt. Ltd, which operates the Best Price cash-and-carry wholesale stores, digital marketplace Flipkart Wholesale will help the e-commerce firm grow its B2B vertical.

Flipkart Wholesale aims to connect local manufacturers with retailers and bring the wholesale marketplace at their fingertips using technology.

The article was first published on livemint.com