NEW DELHI: Global retail giant Walmart plans to raise $2-3 billion as share equity into Flipkart to reinforce its clasp on e-commerce company while buying existing shareholders in a deal. Walmart, the world’s largest retailer by revenue, has almost completed the process to buy a majority stake of India’s largest online retailer Flipkart.
Sources revealed that Walmart may plan to rope in more investors over the years while ensuring that the e-tailer’s operations are in sync with its India strategy.
In response to a questionnaire, Walmart did not wish to comment on any of the question.
A larger equity base and fresh capital are seen to be critical for Flipkart to take on Amazon in India, where the Jeff Bezos-founded company seemed to weigh more over its rival, Flipkart over a decade ago.
Beast of Bentonville is expected to focus on its intention to work with local SMEs and the farm sector, it is a business strategy that it has carried out for its wholesale cash-and-carry venture after its entry has been denied B2C retail market, with which they were planning to open a chain of stores.
Walmart is expected to use its managerial expertise, even though the existing leadership in Flipkart is expected to stay as per their understanding of the market.
Flipkart has decided to sell more than 70% stake to (55-61%)Walmart and Google’s parent (10%) Alphabet in a deal, which will mark the worth of the company at $20 billion.
Walmart India owns 21 stores under the cash-and-carry system in nine states across the country. It operates a global sourcing center in Bengaluru and a technology center, employing approximately 1,200 engineers. Walmart will use its experience in sourcing and work with farmers and kirana stores to highlight its online presence.
Few Business analysts said that, with accession over Flipkart, Walmart will be able to extend its expertise in managing physical goods in the digital space.
