Walmart's ecommerce subsidiary has obtained internal approvals to transfer its domicile from Singapore to India, which is a crucial move toward launching its initial public offering (IPO).
Flipkart, currently valued at $36 billion, is gearing up to unveil its IPO within the next 12-15 months, as reported by The Economic Times. This would represent a significant milestone for India's largest ecommerce platform and could potentially become one of the largest IPOs in India's new-economy sector.
“One of the sources quoted in the report stated that the process has commenced and there is a clear consensus that the company should go public within this timeframe.”
The Walmart-owned ecommerce platform has secured internal approvals to transition its domicile from Singapore to India, a vital step in its journey toward an IPO. Sources indicate that the company aims for a public listing by late 2025 or in the first quarter of 2026.
Flipkart's IPO is anticipated to garner significant attention as it spearheads a wave of new-age companies planning to go public in 2025. This follows the successful outings of other consumer-focused tech firms such as Zomato, Nykaa, and Swiggy, which have generated retail investor enthusiasm in the startup ecosystem.
The Bengaluru-based company has been laying the groundwork for an IPO for quite a while. Discussions surrounding going public began as early as 2021, but unfavorable market conditions in 2022-23 led to delays in these plans. The improving outlook for consumer-tech IPOs has now reignited Flipkart's aspirations for listing.
RECENT DEVELOPMENTS
Funding and growth: In 2023, Flipkart secured nearly $1 billion in funding, including Rs 350 crore from Google. Walmart, which holds an 81% stake, has invested over $2 billion in Flipkart since it acquired the company in 2018.
Focus on profitability: Flipkart has been concentrating on enhancing profitability while sustaining growth. The company reported a 21% increase in operating revenue to Rs 17,907.3 crore in FY24, while losses reduced by 41% to Rs 2,358 crore. Advertising revenue, which is a significant contributor, surged more than 50% to Rs 5,000 crore in FY24.
Expansion into quick commerce: To stay ahead in competition, Flipkart has ventured into the quick commerce sector with its service, Minutes, and its fashion platform Myntra has launched a 30-minute delivery service named M-Now.
The decision to move its holding company to India aligns with a broader trend among startups seeking to list locally. In recent times, companies like PhonePe, Meesho, and Zepto have made similar relocations, attracted by favorable valuations and investor familiarity with Indian markets.
Flipkart's evolution from an online bookstore in 2007 to one of the country's most valued startups has been remarkable. Although its holding company has been situated in Singapore, the relocation to India underscores its long-term dedication to the local market.
Walmart is expected to benefit from Flipkart's IPO. The US retail behemoth has consistently shown confidence in Flipkart's growth prospects, with executives emphasizing strong performance during key events such as the Big Billion Days sale.
"We are evaluating and considering when the appropriate time will be for Flipkart to IPO. However, there is robust growth in both Flipkart and PhonePe, and we are enthusiastic about the Indian market," stated Kath McLay, president and CEO of Walmart International, in May during an earnings call.
Flipkart's growth narrative extends beyond ecommerce. Its investments in payments, advertising, and rapid delivery services are generating multiple revenue streams. The company has also launched Super.money, a new payments application that facilitates Unified Payments Interface (UPI) transactions.
India's ecommerce market has experienced swift growth, reaching Rs 1 lakh crore in sales during this year's festive season. Flipkart has retained its leadership position in this competitive landscape, despite challenges posed by competitors like Amazon.
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