In a move to enter India's digital payment space, the American multinational retail company Walmart Inc is planning to demerge PhonePe, the digital wallet company, from its parent organisation Flipkart, according to a report by The Economic Times.

The demerger will ensure direct ownership of PhonePe with the global retail major, stated the report. 

"Walmart that had paid $16-17 billion to acquire about 82 per cent stake in Flipkart has decided to vertically demerge the two entities and unlock their value separately. The move will help some of the existing investors in Flipkart to cash out in the secondary sale," a source told ET.

The report further stated that, after the demerger, Walmart will have about 82 per cent stake in PhonePe and Flipkart separately, with a combined valuation of $27-30 billion.

Flipkart acquired PhonePe in 2016 which was launched by a trio of former Flipkart executives. Other applications like WhatsApp, Facebook are also looking to get into the digital wallet market.