Flipkart’s IPO Could Double its Valuation

Walmart Aims to Launch IPO in United States

After a surge in ecommerce sales during the pandemic, Walmart (WMT) is now considering turning its investment in Flipkart, India’s largest online retailer, into an initial public offering in the United States. The IPO, which Goldman Sachs (GS) is exploring, could raise $10 billion and boost Flipkart’s valuation to $40 billion. Walmart is thinking about selling roughly 25% in the company.

Flipkart is headquartered in Bengaluru. In India, it competes with companies like Amazon (AMZN) and JioMart, run by Reliance Industries Ltd. Proceeds from the IPO, which would be the largest by an Indian-based company on an international exchange, will likely be used to expand Flipkart’s market share in order to capture accelerating ecommerce adoption brought on by the pandemic.

How Flipkart Has Grown

Flipkart, which is now the largest online retailer in India, began in 2007 with online book sales. Much like Amazon (AMZN) in the United States, the company has since expanded to sell tech products, clothing, household items, and groceries. Walmart bought a 77% stake in Flipkart for $16 billion in 2018. At that time Walmart promised it would take Flipkart public within four years.

Today Walmart has an 82.3% stake in Flipkart. Walmart led a funding round over the summer that raised $1.2 billion for Flipkart and grew the company’s valuation to $24.9 billion. Since then, the coronavirus pandemic has continued to push transactions online through platforms like Flipkart as customers in India try to stay away from crowded public areas.

Flipkart’s Payment Unit Could IPO in 2023

After Flipkart goes public, its digital payments company PhonePe could soon follow. PhonePe competes with Google Pay (GOOGL) and Amazon Pay. In July Flipkart said PhonePe processes over $180 billion in payments per year. Every month, the app processes around 500 million transactions.

Walmart may list PhonePe on a US stock exchange also at a $10 billion valuation. The payment company could then leverage its relationship with Walmart to launch its product internationally. Investors both at home and abroad will have their eyes on this Indian ecommerce giant over the next 12 to 36 months.

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