Flipkart IPO Could Be in Four Years, Walmart Says in Regulatory Filing

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Flipkart IPO Could Be in Four Years, Walmart Says in Regulatory Filing

Highlights

  • The Flipkart IPO should value the company at least $16 billion
  • Flipkart is presently valued at $21 billion
  • It is Walmart's biggest acquisition yet

Walmart Inc said on Saturday in a filing with a U.S. regulator that it may take Flipkart public in as early as four years, detailing for the first time a potential listing timeline for Walmart's largest-ever acquisition.

Minority investors holding 60 percent of Flipkart's shares "acting together, may require Flipkart to effect an initial public offering" (IPO) four years after the close of the Walmart-Flipkart transaction, the Bentonville, Arkansas-based retailer said in a May 11 filing with the U.S. Securities and Exchange Commission.

The IPO should be done at no less a valuation than that at which Walmart invested in the Indian firm, the filing said. Walmart announced earlier this week that it will pay $16 billion for a roughly 77 percent stake in Flipkart in what is the U.S. retail giant's largest-ever deal and a move to take on arch rival Amazon.com Inc in a key growth market.

Flipkart-Walmart Deal: Key Reasons Why It Matters

The investment implies a valuation of nearly $21 billion for Bengaluru-headquartered Flipkart. Minority shareholders after the deal include co-founder Binny Bansal, China's Tencent Holdings, U.S. hedge fund Tiger Global Management and Microsoft Corp.

However, co-founder Sachin Bansal has announced his exit from Flipkart and is said to have sold his entire stake in the company to Walmart. He is expected to net around $1 billion (about Rs. 6,700 crores) for his 5.5 percent stake. Softbank acquired a 20 percent stake for $2.5 billion (about Rs. 16,800 crores) in Flipkart through its Vision Fund last year, and the exit will give it $4 billion (approximately Rs. 27,000 crores). Naspers also sold its 11.18 percent stake for $2.2 billion (about Rs. 14,800 crores).

© Thomson Reuters 2018

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