To take on Amazon in India, Walmart may double Flipkart valuation to $20 billion

American retail giant Walmart may be planning to take a piece of India's e-commerce pie. The multinational chain which operates hypermarkets chains and department stores is reportedly eyeing a large stake in online marketplace Flipkart, and may offer to double the valuation of Flipkart to about $20 billion.

Walmart, the world's largest company by revenue, is gearing up for a renewed online push to take on Amazon in the US and across the world, a TOI report said. The ongoing talks between Walmart and the Indian e-tailer entail multiple options, including one to buy out Flipkart's numerous early shareholders, paving the way for a substantial interest, it said.

If the deal goes through, then the world's biggest brick-and-mortar retailer will own a significant stake in homegrown e-commerce major Flipkart. The deal could help both companies to pool their resources to compete against Amazon in both online and offline retail channels.

Walmart has been vying for a bigger footprint in e-commerce market, whereas Flipkart has been engaged in a head-to-head competition against Amazon India locally. The reports of a deal between the two companies surfaced around September last year when Walmart acquired Jet.com to get a foothold in the e-commerce market. Walmart has been forging new partnerships to take on Seattle-based Amazon.

At present, SoftBank is the largest shareholder in Flipkart. In August, Japanese internet giant SoftBank invested over $2.5 billion in Flipkart to become one of its largest shareholders. SoftBank's new investment came through its $100 billion technology-focused Vision Fund.

Walmart could spend anywhere between $5-10 billion if the offer to buy a large stake finds favour with Flipkart, making it one of the largest cross-border deals in India, the report added.

"Post the diligence, Walmart's offer involves one-fifth in primary capital with the rest of the transaction being secondary sale of shares to Walmart by existing investors. Walmart wants to start ahead of Amazon and India will be the only market where it can possibly do that by investing in Flipkart, which is being valued at $18-20 billion," the report quoted a person aware of the details.