INSUBCONTINENT EXCLUSIVE:
Mumbai: The Walmart-Flipkart deal, the largest MA in India by a wide margin, points to a boom in the domestic organised retail industry that
is estimated to more than double in four years to about $115 billion by 2020.
Flipkart is expected to make losses until 2020: It has been
valued at FY18 EV to gross merchandise value of 2.8 times or FY18 EV to net sales of 4.4 times
Deepak Jasani, head of retail research at HDFC Securities.
Jasani said the deal points to further retailing alliances locally, potentially
per cent stake in Flipkart for $ 16 billion
Although the deal may look expensive on an absolute basis, the valuation is at a discount to that of Avenue Supermarts, and at a significant
premium to the valuations of Future Lifestyle Fashions, Future Retail and Shoppers Stop.
SoftBank may Hold Flipkart Stake for 6-12
MonthsSoftBank Vision Fund had invested about $2.5 billion in Flipkart in August 2017 and is expected to pocket $4 billion if it sells its
stake in Flipkart, said one of the people cited
potential merger with Amazon India
on income earned from the source country and also the country of residence.
To avoid the short-term taxation issue, SoftBank may hold the
single largest shareholder along with Tiger Global Management, whose stake is expected to come down from 20 per cent to 5 per cent after the
transaction closes.
It could not be ascertained if SoftBank would eventually opt to keep a part of its stake in the Indian etailer even as
the US retailer had said in a statement
Other remaining shareholders in Flipkart are cofounder and group CEO Binny Bansal (4-5 per cent), Tiger Global (5 per cent), Tencent (6 per
cent) and Microsoft (1 per cent)
The remaining stake is held by a few small investors and employees.
SoftBank had invested in Flipkart after a failed attempt to orchestrate
a merger with Snapdeal, which was its first bet in the Indian online retail space back in 2014
leadership, but saw the company slip to a distant third behind Amazon India by 2016.
The Flipkart group, which includes fashion portals
according to a recent report by Forrester Research.
