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Flipkart to enter profit zone in 2-3 years: Bansal

31 October 2015

Leading e-retailer Flipkart is hopeful of becoming profitable in the next two - three years and expects to launch an initial public offering in two to five years, its co-founder Binny Bansal said on Friday.

"We expect to get in profitable zone in next 2-3 years," Flipkart co-founder and COO Binny Bansal told reporters in Hyderabad, where the company opened its largest warehouse (See: Flipkart plans to invest massively in logistics).

Driven by increasing internet population and growing preference for online shopping, ecommerce companies have witnessed a huge jump in sales.

Investors have also pumped in millions of dollars to build the infrastructure and grow the ecosystem.

While the number of transactions and sales through such platforms have zoomed, industry experts have also criticised the huge discounts offered and expressed concerns of inflated valuations.

Flipkart itself has raised closed $2 billion from investors like Tiger Global, Naspers and GIC, Singapore's sovereign wealth fund. The company is valued at over $10 billion currently.

Most ecommerce companies are operating at a loss because of the heavy investments being made to build the back-end and delivery infrastructure. Since these companies are privately held, they do not disclose their financial results.

Flipkart has 45 million registered users clocking 10 million daily visits and delivers about eight million shipments per month.

Replying to a query about the IPO and its timing, Bansal said: "...Yes there is lot of talk of IPO in Press. I don't think the company ever talks about IPO. Obviously, there will be an IPO".

"I think IPO will happen probably in next 2-5 years... It depends on lot of factors... I will be guessing up when it is going to happen," Bansal said adding that since the company is backed by venture capitalists, IPO will happen.''

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