In a filing to the US regulator, Walmart after taking over a majority stake in Flipkart, said that it may list the Bengaluru-based e-retailer in as early as 4 years. In the filing to the U.S. Securities and Exchange Commission on May 11, the Bentonville, Arkansas-based retailer said that minority stakeholders who own 60% of Flipkart's equity " acting together may require 4 years time to effect an IPO issue of Flipkart after the transaction between Flipkart and Walmart completes.
Minority stakeholders in the company after the strategic corporate development goes through include the company's co-founder Binny Bansal, U.S. hedge fund Tiger Global Management, Microsoft Corp and Tencent Holdings of China.
The filing added that IPO shall be launched at a valuation not less than the price which the US retail-giant will pay to acquire 77% stake in Flipkart. In the largest ever acquisition by Walmart, the financial consideration of the deal is announced at $16 billion. With this investment, Flipkart will be valued at approximately $21 billion. The acquisition is aimed to boost Walmart's presence in the growing Indian e-retail space and to take on rival company Amazon.
The deal expected to complete by the end of this year is seeking approval of the India's anti-trust regulator. Further, in accordance with the deal terms, Walmart will appoint five directors to the board of Flipkart, wherein one place shall be taken on by Binny Bansal, 2 directors will be appointed by the minority shareholders. In future, the US giant may also consider appointing the sixth board member on approval by Flipkart's directors.
Also, the US retailed added that it could appoint a new Chief executive at Flipkart and also re-shuffle other key positions at the group companies after consultation with the Board. It also said that Walmart or its group companies can ask the acquired company to issue fresh ordinary shares worth up to $3 billion before the transactions and on or before the first anniversary of the closing.
Alphabet, the parent company of Google, is in talks to commit an investment of $3 billion for acquiring nearly 15% stake in Flipkart.
Flipkart, incorporated in the year 2007, was founded by Binny Bansal and Sachin Bansal who initially used the online platform to sell books.