Walmart, the world’s largest retailer, could be forced to publicly list its new acquisition, Flipkart Group. It should be within 4 years, at the request of minor shareholders, a public filing shows. The acquisition is the largest one in the retailer’s history with a whopping $16 billion. This investment implies a valuation of nearly $21 billion for the Bengaluru based Flipkart. The public offering should be no less a valuation than what Walmart invested in the Indian e-commerce firm, the filing said.
Earlier this week, Walmart paid $16 billion for a 77% stake in Flipkart. This puts Walmart in the same position as rival Amazon, which is pretty popular in India. Now both companies will rival each other in a key market growth. Walmart has now a foothold in one of the fastest growing economies in the world with a 1.3-billion consumers.
“While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart’s ambition to transition into a publicly-listed, majority-owned subsidiary in the future,” Walmart said.
But seems like the deal is not as straightforward as most think it is. Chances are that Walmart’s stake in Flipkart could fall below 77% before a potential IPO. This will increase the chances of a great share from other investors and shareholders involved with Flipkart,
The deal now awaits clearance from India’s anti-trust regulator and is expected to close later this year.