Walmart may take Flipkart public in as early as 4 years

Walmart may launch IPO for Flipkart in as early as four years

Walmart may launch IPO for Flipkart in as early as four years

Flipkart may opt for an initial public offering after four years of closing the Walmart deal at a valuation no less than what was paid by Walmart. That growth came just 9 months after SoftBank used its Vision Fund to invest about $2.5 billion in Flipkart.

"While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart's ambition to transition into a publicly-listed, majority-owned subsidiary in the future", Bentonville, Arkansas-based Walmart said Wednesday, before details of the arrangements were disclosed in the filing late Friday. In fact, the Beast of Bentonville had also said that it hoped to meld Flipkart's numbers into the revenues of Walmart's worldwide 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.

Apart from outlining Flipkart's IPO plans, Walmart also detailed other clauses of its shareholding agreement, including the constitution of the Flipkart board for the next two years.

Last week, Walmart Inc announced acquisition of 77 per cent stake in Flipkart for about $ 16 billion (Rs 1.05 lakh crore) in the largest e-commerce deal which will give the United States retailer access to the Indian online market that is estimated to grow to $ 200 billion within a decade.

Elaborating on the deal, Walmart Inc said the Flipkart board will initially have eight directors: five Walmart-appointed, two appointed by certain minority shareholders and one founder.

Meanwhile, sources with direct knowledge of the development said that Japan's SoftBank has not yet made a decision to sell its 20-22 per cent stake in Flipkart to Walmart.

"In addition, holders of 60 per cent of the Flipkart shares held by the minority shareholders, acting together, may exercise veto rights to prevent certain significant transactions or other events involving Flipkart", it added.

In the run up to deal, it was speculated that Walmart may partner Google parent Alphabet for the Flipkart acquisition.

Interestingly, Walmart also has the right to appoint or replace the Chief executive or other principal executives of the Flipkart group of companies, subject to consultation rights of the Flipkart board and the founder Binny Bansal.

The remaining 23% stake in Flipkart will be held by minority shareholders including co-founder and group chief executive officer Binny Bansal, Chinese Internet conglomerate Tencent, investment firm Tiger Global and software firm Microsoft Corp. These rights will, however, expire if Walmart increases its stake to 85% or more, the retail giant noted in the filing. Walmart's filing assumes significance at a time when Flipkart's key shareholder, Japanese internet and telecoms giant, Soft-Bank, is undecided about the sale of its shares.

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