"Flipkart was a company that was built to be sold. First, the founders sold their stake to financial investors and now they are finally looking to sell a majority stake to a strategic investor,” says Harminder Sahni of Wazir Advisors. Indeed, for a company more in the news for its valuation and fundraising than anything else, things are finally falling in place. Two years after Walmart first started talking to Flipkart in 2016, the world’s largest retailer is said to have completed its due diligence and has made an offer to buy more than 51% stake in Flipkart for $10-12 billion through a mix of primary and secondary shares, which could value the company at around $20 billion. The secondary shares will be purchased at a discounted value to the primary and most of its early investors including Tiger Global, Accel Partners, Naspers, IDG Ventures and others are expected to cash out in this round. The deal is likely to be completed by the end of June. The deal raises Flipkart’s valuation by 70% from the $12 billion that it was in the previous round in August 2017, where it raised $2.5 billion from Japanese conglomerate SoftBank. For a company that was nearly written-off in its e-commerce battle with Amazon, it is a stellar comeback. For Walmart, it is the quickest way to gain scale in India, and for Amazon, acquiring Flipkart would have given it complete domination in a market that is becoming increasingly important for it.
While Walmart has maintained that India remains an important market, it has hardly made any headway in the $670-billion market. After it split up with Bharti Enterprises after its seven-year partnership, Walmart now caters to the B2B segment through its 21 cash and carry stores, Best Modern, besides having a fulfillment centre in Mumbai. With over a million members, mainly consisting of mom-and-pop stores, hotels, and restaurants, the Indian arm of the world’s largest retailer clocks a modest revenue of Rs.3,600 crore. Policy constraints with respect to FDI investment in multi-brand retail resulted in