Flipkart, India’s largest e-commerce company managed by Walmart Inc., is advancing to the initial public offer (IPO) as soon as the fourth quarter of this year, according to people familiar with the matter. The American retail giant has formed an internal IPO group for Flipkart and relies on traditional practices in the United States, people said, requesting anonymity because the information is confidential. Flipkart had explored public mobility through an anonymous company, to speed up the listing process, but that route is no longer being considered, said one of the people. The initial valuation could be as high as $35 billion as it goes public. Shares at Walmart rose 1.1% to $140.92 in New York trading on Tuesday, before a steady decline, after Bloomberg News reported a potential IPO.
Saroj Panigrahi, a former JPMorgan Chase & Co lawyer hired by Flipkart in December, is driving the IPO process, people said. JPMorgan and Goldman Sachs Group Inc. are in talks with the Flipkart about advising on the agreement, and are the first to be officially nominated, they added. “IPO negotiations are still ongoing and could change. It is possible that Flipkart could eventually choose a location outside the US,” one person said. E-commerce has emerged as a clear winner from the coronavirus epidemic, with huge global demand for investors betting on the future of the business. Coupang Inc. of South Korea in March with an offering when investors quickly pushed its estimate to more than $75 billion.
Amazon.com Inc., which competes with Flipkart in India, saw a rise in its shares by more than 75% last year. It is now over $1.6 trillion. “Flipkart’s IPO will be a major, exciting public offering and a significant milestone for India’s startup ecosystem,” said Neha Singh, co-founder and chief marketing officer of the private market intelligence researcher Tracxn Technologies Pvt. In India, start-ups are targeted at public markets this year and next year, with at least ten offerings in line, includes India’s online insurance aggregator, Policybazaar, and leading food delivery platform Zomato.
Flipkart was founded in 2007 and was acquired by Walmart, 11 years after the largest acquisition of an American retailer. Today, Flipkart includes fashion retailers Myntra and Flipkart Wholesales, its digital market is focused on small and medium-sized businesses. It has more than 300 million registered users, more than 150 million products in more than 80 categories. Walmart’s acquisition was initially met with scepticism, which is reflected in the declining stock price. The American giant has struggled to make a profit with e-commerce, and investors are worried about over-paying for business that loses money away from headquarters. The successful start of the Flipkart stock market could eliminate any nagging concerns. “With the IPO, all doubts will be gone and Walmart will be full circle,” Singh said. Law firm Shardul Amarchand Mangaldas & Co. will represent Flipkart in India.
