Published: Fri, May 11, 2018
Money | By Ethel Goodwin

Flipkart not a startup anymore after Walmart deal, say experts

Flipkart not a startup anymore after Walmart deal, say experts

This deal puts Flipkart's valuation at a whopping $20 billion, and paves the way for the USA based Walmart-Amazon rivalry to extend to the Indian market.

Walmart has clarified that it looks forward to accomplishing Flipkart's decision and will make efforts to switch to an IPO with major shares to be sold in the future.

Walmart president and CEO Doug McMillon said India is one of the most attractive retail markets in the world, due its size and growth rate.

The US bricks and mortar retail giant bested its US counterpart Amazon after the ecommerce firm reportedly made a competing offer to acquire Flipkart that ultimately failed.

Traders body CAIT today said Walmarts USD 16 billion acquisition of home-grown retailer Flipkart will affect Indias retail sector "very badly" and demanded scanning and scrutinising the deal from "different angles" by the government.

Sachin Bansal will be selling his 5.5 % stake in Flipkart that's worth around $1 billion to Walmart, reports the Economic Times. On Wednesday, Walmart bought 77 per cent of Flipkart share from existing shareholders, including Japan's SoftBank, for $14 billion and investing $2 billion of fresh equity.

The deal is subject to regulatory approvals including Competition Commission of India, and is expected to close later this year.

"It's capital intensive business that needs deep pockets which Walmart has", she tweeted. Walmart has revealed it will pay $16bn for a 77 percent stake in the Indian e-retailer. Walmart's Krish Iyer will be the CEO of the Bengaluru-based firm.

For more of the latest retail news that's changing our industry, stay tuned to Deli Market News. At that time, both eBay and Flipkart, also entered into commercial agreements meant to boost cross-border trade for both companies. The acquisition surpasses Walmart's $10.8 billion deal to buy Britain's Asda in 1999 and its acquisition two years ago of online retailer Jet.com for more than $3 billion.

The hot-off-the-fire deal is considered to be a brilliant strategic move to allow the U.S. retail behemoth to operate globally. "We have met before and I am sure will meet again".

It is "a clear attempt to control and dominate the retail trade of India by Walmart", the Confederation of All India Traders said, adding that the deal would encourage predatory pricing, hurt Indian businesses and create an uneven playing field. "Only the venture capitalist, investors and promotors will be benefitted and not the country", CAIT said in a statement.

He also said that the deal is as per India's foreign direct investment (FDI) norms. "Make in India is something exciting to us", he said. "There will be cent per cent rise in Flipkart's brand value with the brand becoming more credible", said an expert from the authenticity.

The Bansals of Filpkart may have clinched the biggest deal in e-commerce space, but the jaw-dropping $16-billion transaction left co-founders Sachin and Binny "emotional" and "sad".

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