Flipkart reportedly has added SoftBank Group Corp to its list of investors in a $3.6 billion funding round. SoftBank’s participation multiplied the valuation for Flipkart to $37.6 billion in less than three years.
Flipkart IPO: target to reach
Upon the upcoming public listing, Flipkart is aiming to reach $50 billion in valuation. According to Reuters‘ report from March, Flipkart aimed to go public as early as this year through a merge deal with a special purpose acquisition company (SPAC).
Flipkart was able to raise around $800 million from the latest funding. Companies that are among the lead investors namely are Canada Pension Plan Investment Board. GIC, SoftBank Vision Fund 2 and Walmart.
A partner at Softbank Investment Advisers, Lydia Jett, stated, “SoftBank’s re-investment in Flipkart is driven by our experience with and conviction in the company’s management team to continue addressing the needs of the Indian consumer in the decades to come”.
As a part of the 2018 deal, Flipkart had received about a 20% stake in Softbank.
Flipkart and Walmart’s relationship
Walmart owned 77% of Flipkart’s stake worth $26 billion since 2018. Flipkart has since expanded its business to include small towns and cities.
The company also updated products sold through its platform by adding furniture and grocery. Its warehouse, consequently, kept on growing along with its rival’s Amazon’s India unit.
Flipkart is looking to allocate the new capital funds for operations expansion. The company also plans to invest in its grocery, fashion and last-mile delivery programs.
A senior portfolio manager at Roosevelt Investment Group, Jason Benowitz, commented that Walmart might hit the jackpot with Flipkart. “It is a triumph for Walmart as investors were initially skeptical of the U.S. retailer’s tie-up with Flipkart,” Benowitz said, as quoted from Reuters.
Benowitz further added that Flipkart’s success could likely attract more investors to India as a foreign investment destination.
IPO fever hits India
Several Indian startups have spelt out plans to go public to cash in on liquidity by foreign funds. Some closely watched include food delivery startup Zomato, payments services Paytm, beauty brand Nykaa and ride-hailing service Ola.
As of July 9, India has recorded twenty-two companies IPOs. The IPOs in the first half of 2021 accumulated $3.6 billion, a significant rise from $1.1 billion of the same period last year, Refinitiv data shows. Additionally, this is the highest level for India since 2008.
Read also: Zomato IPO Next Week: What to Know
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