US retail giant Walmart, which owns a majority stake in the Indian e-commerce retailer Flipkart, gave a green signal for Flipkart's Initial Public Offering (IPO). Walmart has said it is "open to an IPO" for its Indian e-commerce arm Flipkart but there is "no specific timeline" for the share sale.
Both Flipkart and payment app PhonePe continue to do well, Walmart International President and CEO Judith McKenna said while speaking at the DBAccess Global Consumer Conference on June 7.
"We always made it clear from the day we made the acquisition or the investment, that we would be open to an IPO," said McKenna. However, she noted that there is no specific timeline for the IPO.
"But if we build a strong business, and we continue to do the things that we need to do to ensure that long-term and sustainable growth, that is a possible route that we would consider in the future, but certainly no specific timeline on that (IPO)," she said.
Walmart invested $16 billion in 2018 in the Bengaluru-based e-commerce platform to pick up a 77 percent stake. In July 2020, it led a $1.2-billion round in Flipkart, valuing the e-commerce firm at $24.9 billion.
A $700-million reunion between Flipkart and billionaire Masayoshi Son's SoftBank Group Corp may be on the cards, three years after the Japanese conglomerate sold its stake in the e-commerce giant, news reports suggest.
SoftBankâs proposed investment in Flipkart will be part of a $1.2-1.5 billion funding round under its Vision Fund 2, Mint and VCCircle reported citing persons aware of the development.
Meanwhile, Flipkart is also said to be working on launching its IPO next year. McKenna further said both Flipkart and PhonePe businesses are doing well.
"I am really pleased with what they have done since we acquired them. We have said that clearly a number of times," McKenna added. E-commerce has seen strong growth in India amid the pandemic as containment measures introduced millions to the convenience of online shopping, and prompted seasoned online shoppers to buy more.
Social distancing compulsions, massive smartphone base and reliable broadband have galvanised e-commerce uptake beyond metros, deep into smaller cities and towns. E-commerce companies are ramping up capacities and hiring to cater to the growth in order volumes.
McKenna also noted that after COVID-19, there is an increase in digital penetration overall in India. Talking about PhonePe, McKenna said the payment platform has just crossed the 300 million users mark in a five-year period. Talking about PhonePe, McKenna said the payment platform has just crossed the 300 million users mark in a five-year period.
"So they (PhonePe) are going into new financial services areas, be that gold... insurance, mutual funds and different areas, which are all strengthening to the P&L... So confident and happy with the progress the businesses are making," she said.
[Inputs from PTI]