Walmart is prepping for Flipkart’s $10 billion IPO in the US: Report

This listing could more than double Flipkart's valuation since Walmart acquired it in 2018.

Walmart has started working with Goldman Sachs on the listing of Flipkart, its Indian unit, to raise close to $10 billion, sources told Hindustan Times.

Two people in the know told HT that the US retailer wants to sell 25% of Flipkart.

“Work on the IPO is on in full swing and the advent of the pandemic has only hastened the process, given the spectacular surge in demand on e-commerce platforms,” one of the two people said.

If the IPO plans for Flipkart go through, it would be the biggest listing of an Indian company on foreign exchanges and will more than double the company’s valuation since the acquisition to $40 billion.

Walmart had bought a 77% stake in India’s homegrown e-commerce giant in 2018 for $16 billion and had committed to taking it public in the following four years.

Earlier this year, Flipkart raised $1.2 billion in a funding round led by its parent Walmart, valuing the company at $24.9 billion. While the Covid-19 pandemic roiled most industries, e-commerce sales were at record highs throughout the year as physical shopping replaced online ordering across the world. Flipkart also reported a 10-fold increase in its shipments during the festive season this year.

Flipkart has also been in the news for diverse acquisitions. The e-commerce giant recently acquired gaming startup Mech Mocha and augmented reality startup Scapic. It also put money into fashion brands like Wrogn and USPL. The company is also bolstering its retail business by reaching out to more and more local retail shops, or kiranas.

At present, Walmart owns an 82.3% stake in Flipkart. Other key investors include Tiger Management, China’s Tencent, Accel Partners and Microsoft.

The new batch of funds from the listing will most likely be committed to expanding Flipkart’s e-commerce business while the market is riding high on online shopping, according to the report.

PhonePe, Flipkart’s digital payment vertical, is also reportedly planning to go public by 2023 on a US exchange eyeing a valuation of $10 billion. E-commerce major Flipkart on Thursday announced a "partial spin-off" of PhonePe as the digital payment firm raised $700 million in funding, valuing it at $5.5 billion.

Competing in the booming digital payment space with Amazon Pay, Google Pay and Paytm, Flipkart had announced in July PhonePe exceeded payments value of $180 billion through more than 500 million transactions.