Flipkart IPO In 2021: Gunning For $50 Billion Valuation, But Ditches India

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The poster boy for Indian e-commerce Flipkart is finally gunning for an IPO. The twist to the news is the listing country, as the eCommerce major is not eyeing to list itself in the home country first.

On Wednesday, a media report revealed that the Walmart backed e-commerce venture may get valued at $50 billion and is planning to foray into public markets latest by the year 2021. However, it will do so either in the United States or Singapore.

The estimated valuation of Flipkart touched a whopping $24.9 billion after it raised $1.2 billion investment led by the US retail king Walmart in the month of July.

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According to a person in the know, even though the Flipkart IPO plan is still a year away, the company has begun preparing for the same. Walmart has engaged several investment banks such as Goldman Sachs, Morgan Stanley to make Flipkart IPO a success.

It’s also being speculated that combined with PhonePe – its digital payments arm – the IPO could value Flipkart as much as $50 billion.

It was somewhat known from the last year itself that the Walmart-backed e-commerce marketplace had its eyes set on the United States equity market for a potential IPO by the year 2022. 

The Chief Executive Officer of the Flipkart Group Kalyan Krishnamurthy, along with the rest of the board members of the e-commerce marketplace, decided on a concrete timeline back in 2019 itself.

Since the last year, one of the core focus areas for the company has been to tighten their compliances and achieving profitability successfully within the next two years to float the much-awaited Flipkart IPO with very minimal roadblocks.

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In FY’19 Flipkart Ltd posted consolidated revenue of Rs 43,615 crore, up 42% as compared to the previous fiscal year. The growth in revenue, however, was comparatively slower but the company managed to cut down its loss significantly. The steep fall in financial and marketplace costs helped the group to reduce the loos 63% to Rs 17,231 crore in the same fiscal year.

Flipkart IPO: US Or Singapore, Not India

The org structure of Flipkart is quite complex. The holding company Flipkart Ltd is incorporated in Singapore to avail many taxation benefits. Hence, filing for an IPO in the same country will definitely lead to smoother processing of approvals. However, listing in the United States has its own set of benefits as well. That is where its parent company Walmart is headquartered which basically means Flipkart will definitely have access to a bigger pool of funds and resources.

The sources in the know have revealed that all the preparations and discussions that are currently ongoing for this are being kept largely internal but Flipkart will soon be leveraging the viewpoint of external advisers as well.

It’s worth noting that the initiation of talks related to Flipkart IPO in the US and Singapore is triggered after the Indian government drafting new regulations which can let domestic companies get listed overseas directly.

However, this isn’t the first time the news of the Indian e-com marketplace wanting to go public has surfaced. Back in 2015, Flipkart was all set to make its debut on the New York Stock Exchange (NYSE) and raise a minimum of USD 5 billion through the Initial Public Offering, however that plan never really materialised.

We hope that this time all the talks and developments will result in Flipkart IPO. Flipkart has denied reacting to all media reports speculating Flipkart IPO proceedings.

Do you think the market conditions are favourable for Flipkart IPO? Do let us know your views in the comment section below.

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