India's biggest online store - Flipkart has purchased back its shares worth $350 million numerous minority investors, as India's top funded internet start-up plans to offer a greater part of stake to Walmart Inc. The minority investors, who returned their shares, include ICONIQ Capital, DST Global and IDG Ventures.
Walmart intends to spend around $8 billion to $12 billion to purchase a major share in Flipkart, which is estimated to be around 55% and the company will be valued at $20-21 billion.
In a transaction, around 1.9 million preference shares have been purchased the minority investors by the nation's biggest online retailer that values Flipkart at $17.69 billion. Data Intelligence platform Paper.VC. sourced this data, which was recorded and filed with Singapore's Accounting and Regulatory Authority.
Flipkart's initiative of buyback in order to transform itself into a private firm makes way for finalizing the deal with Walmart.
In the past one year, this is the second time such a transaction has taken placea significant number of minority shareholders have sold their shares and have completely exited. In August 2017, SoftBank had bought over quite a chunk of shares the minority stakeholders by pumping in around $2.5 billion to buy both primary and secondary shares.
In the recent buyback, quite a few individuals such as ShekharKirani of Accel and Deep Nishar of SoftBank have also sold their shares. Besides individuals, among the various large investing companies such as Accel, Tiger Global, Naspers, eBay and Microsoft – Accel and Global have already sold a small portion of their shares as part of this deal.these companies do continue to remain on the capitalization table. Along with the companies and individuals even pension funds have exited Flipkart.
On 2nd May, there was a news on Mint about Walmart negotiating in the final stages to buy a major share in Flipkart. The report also specified that some of the Flipkart investors such as SoftBank Group Corp and Walmart are at the final stage of the deal, which could take almost a month to sign.
Mint along with other prestigious publications have also been reporting of this deal for the past couple of months. In January, The Economic Times was the first publication to report about the negotiations, however, it had stated investment would be a minority one.
As per the story published on Mint on 2nd May, Walmart wants co-founders of Flipart – Binny Bansal (Group Chief Executive Officer) and Sachin Bansal (Executive Chairman) to continue in their existing roles even after Walmart has acquired Flipkart.
After this deal, Binny Bansal and Krishnamurthy - a previous executive at Flipkart's most significant shareholder Tiger Global Management will probably continue. Whereas, Sachin Bansal has not yet taken any decision on how much stock he will sell, however, he is also likely t continue in the present role.