Walmart-owned Flipkart, a leading player in the e-commerce sector, has successfully secured a significant capital infusion of Rs 3,249 crore from its Singapore-based parent company. This financial boost comes as part of a strategic move to strengthen its market position ahead of an anticipated IPO.
Capital Raise Through Equity Shares
In a recent move to bolster its financial standing, Flipkart’s board approved the issuance of 470,773 equity shares at a price of Rs 69,014.7 each. This initiative aims to raise funds from Flipkart Marketplace Private Limited, as indicated by filings with the Registrar of Companies (RoC). This latest capital raise follows a previous round in which Flipkart secured approximately Rs 1,400 crore from the same parent entity last year.
- Total raised in 2023: Rs 3,249 crore
- Previous capital raise: Rs 1,400 crore in 2022
Preparations for IPO and Market Expansion
As Flipkart gears up for its initial public offering (IPO), the company is shifting its operational base back to India. This strategic move is expected to culminate in the filing of its Draft Red Herring Prospectus (DRHP) within the next few months.
Walmart, the majority stakeholder, holds an impressive 85% of Flipkart, having acquired a controlling interest back in 2018. Other notable investors include Tencent, CPP Investments, GIC, SoftBank, and Microsoft.
Venturing Into Quick Commerce
In addition to its IPO preparations, Flipkart is making strides in the burgeoning quick commerce sector with the launch of Flipkart Minutes. This new service positions the company in direct competition with established players like Zomato’s Blinkit, Swiggy Instamart, and Zepto in major urban areas.
Meanwhile, its main competitor, Amazon India, is also eyeing the quick commerce market and is currently piloting similar offerings in Bengaluru.
Future Listings and Financial Growth
Reports suggest that Flipkart is in discussions with investment banks to potentially spin off its Indian operations, setting the stage for a public listing. Another competitor, Meesho, is also preparing for a stock market debut with plans to raise around $1 billion.
In terms of financial performance, Flipkart reported a 20% increase in operating revenue for the fiscal year 2023-24, reaching Rs 17,907 crore. Notably, the company managed to reduce its losses by over 41%, with a total loss of Rs 2,359 crore.
Analysts now point to Flipkart’s growing dominance in the Indian e-commerce landscape, asserting that it has surpassed Amazon India’s market share, establishing itself as a key player in the industry.
This capital raise, along with strategic expansions and forthcoming IPOs, underscores the competitive nature of the Indian e-commerce market, as companies vie for dominance in an ever-evolving landscape.
