Wal-Mart in talks to buy stake in Flipkart
US-based retail corporation Wal-Mart Stores Inc is in talks to buy a minority stake in Flipkart, two sources familiar with the matter said, as the world’s biggest retailer aims to get a slice of a fast-growing online retail market.
One of the sources said the US retailer was looking to invest between $750 million and $1 billion in Flipkart, but the final value and size of the stake would depend on the outcome of talks about the e-tailer’s overall valuation.
Retail collaboration
He added Wal-Mart and Flipkart were also contemplating a collaboration that would see them leverage each other’s expertise in retail and supply chains in India.
Both sources declined to be identified because the talks are preliminary and have not been made public. Wal-Mart in India and Flipkart declined to comment.
“With Amazon slowly taking a lead over the Indian players, all these unicorns including Flipkart and Snapdeal are out there in the market to raise funds,” the source said.
“Companies like Wal-Mart would be more long-term investors, but there aren’t too many like them to write such big cheques.”
Flipkart has been valued at about $11.5 billion, media reported last month, citing a US regulatory filing from investor Valic, a division of American International Group Inc. The company was valued at as much as $15 billion earlier this year, but cut-throat competition, reduced private funding, and elusive profitability is putting pressure on e-commerce players in India.
Source: The hindu
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