Published: Sun, May 13, 2018
Economy | By

Walmart May Launch Flipkart IPO In As Early As 4 years

Walmart May Launch Flipkart IPO In As Early As 4 years

According to the filing, Walmart or its units could ask Flipkart to issue new ordinary shares of up to $3 billion before the close of the "transactions and on or before the first anniversary of the closing".

Minority investors holding 60% of Flipkart's shares "may effect an IPO" four years after the close of the transaction, Walmart said in the filing to the US Securities and Exchange Commission. In fact, the Beast of Bentonville had also said that it hoped to meld Flipkart's numbers into the revenues of Walmart's global operations by the end of the second quarter and had suggested that might impact the company's earnings per share by up to 30 U.S. cents. The Masayoshi Sonled, SoftBank group invested $2.5 billion in Flipkart in August previous year through its $100 billion Vision Fund. Walmart is investing $2 billion (approximately Rs 134.78 crore) in cash and purchasing shares worth $14 billion ( approximately Rs 944 crore) from Flipkart's existing shareholders, the SEC filing said.

Even it would appoint or replace Flipkart's chief executive and other key executives of group companies after consulting Bansal and the board. But two of the directors appointed by the USA retailer would not be affiliated with Walmart for the next two years. It will also constitute an eight-member board, of which five will be appointed by Walmart.

With Flipkart founded in 2007 by former Amazon employees Sachin and Binny Bansal and with Walmart becoming its largest stakeholder, more new information about their deal is broadcasted all over the media.

Last week, all significant shareholders in Flipkart like Naspers, venture fund Accel Partners and eBay had confirmed they were selling their shares to Walmart. This could take Walmart's stake to over 85 per cent.

"Shareholders agreement would expire upon the consummation of the IPO, whether initiated by the board or the minority stockholders", it added.

If Walmart transfers a sufficient number of Flipkart shares which gives rise to a situation that it no longer controls a majority of the Flipkart shares, then each minority shareholder will also be entitled to transfer all of its holding to the proposed buyer of Walmart's holding. "If the drag along right is exercised, each minority shareholder must be entitled to sell all of its shares in the proposed transaction", the filing added. The investment has nearly doubled, SoftBank CEO Masayoshi Son said on a post-earnings conference call.

Flipkart board will have co-founder Binny Bansal, who has made a decision to stay on, as well as two directors from other minority shareholders that includes Tencent Holding, Tiger Global and Microsoft Corp.

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