Flipkart parent gets a Rs2,190-cr equity boost from Walmart
12 December 2018
Walmart-owned online retailer Flipkart is getting a fresh infusion of Rs2,190.64 crore in the form of equity infusion by Walmart in Flipkart’s Singapore entity. The funds were infused in the form of equity shares allotted on 4 December 2018.
Flipkart Private Ltd, Singapore (formerly Flipkart Ltd)was allotted some 7,45,118 equity shares of a nominal value of Rs1 per share, at a premium of Rs29,399 per share, reports quoting data intelligence platform paper.vc said.
This is Walmart’s first major infusion of capital into Flipkart after it acquired a majority stake in the latter for $16 billion in May.
The fresh infusion of funds by Walmart comes amidst reports that Flipkart may invest in or partner with offline retailers in groceries and furniture to become a leader in these categories as it bids to take on arch rival Amazon in India.
Flipkart also reported exponential growth with sales in some months leaping by up to 80 per cent, in signs that the e-commerce sector continues to witness high growth in India.
According to Flipkart CEO Kalyan Krishnamurthy, the online retailer is now at least ‘twice the size’ of its nearest competitor, implying Amazon, the Mint quoted him as saying in an interview.
Flipkart is also looking at the video content business on its own or in partnership with a video content firm, as part of its broader loyalty programme, which was launched a few months ago, the report quoted Krishnamurthy as saying.
Flipkart is reported to have held talks to buy a stake in Star India’s video streaming service Hotstar, as part of a broader strategy to attract more internet consumers and shoppers.
Krishnamurthy said that Flipkart plans to invest heavily in growing newer categories such as furniture and groceries. Flipkart may invest in or partner with offline retailers in groceries and furniture to become a leader in these categories.
India’s $18 billion e-commerce market still depends heavily on sales of mobile phones, fashion and televisions, while the overall retail market has to cater to groceries, fashion etc.
While Walmart has started the process by laying off 60 per cent of Flipkart subsidiary Jabong’s 450 employees, the fate of Myntra is not known.
AsWalmart targets the flab and redundancies at Flipkart, especially in functions such as operations, the e-commerce major is set to see the exit of key talent, including business heads across all functions of the fashion lifestyle e-tailer.