Flipkart planning to go private with buying shares back from Small Investors

Flipkart planning to go private with buying shares back from Small Investors”

Flipkart group, including fashion portals Myntra and Jabong, have a combined market share of over 39.1 per cent while Amazon has 31.1 per cent share in the Indian online retail market, according to a recent report by Forrester Research, the ET report said. Amazon has reportedly also sought a non-compete agreement with Flipkart's founders.

As reports of Flipkart's imminent acquisition by Walmart and also Amazon gather steam, global mutual funds are joining the ranks in their assessment and valuation of India's e-commerce poster boy. Flipkart's investors and founders are in favour of the deal with Walmart, with founder Sachin Bansal overseeing final negotiations with Walmart, the TV report said.

The offer could trigger a bidding war between Amazon and Walmart - something the two retailers have already reportedly been involved in before. Furthermore, Flipkart founder Sachin Bansal recently visited the United States to negotiate with Walmart, and the retail giant may return the favour by visiting India soon to close the deal.

Walmart is said to have had the backing of Flipkarts majority shareholders who believe a merger with Amazon would not go past the Competition Commission of India, besides facing a backlash from different sections of the trading community. Flipkart did not immediately respond to an email seeking comment.

With India seen as the next bastion of growth for e-commerce Amazon and Walmart have been picking up their efforts in the country. Amazon entered the Indian market around 2012 and has 31 percent of the online retail market, according to Forrester, eight percentage points behind its homegrown rival.

The sharp fall in the share price of InterGlobe Aviation, the company that operates IndiGo, has come under the regulatory scanner.

It is likely to involve giving cash exits to some existing Flipkart investors as well, a source close to the matter said.

Walmart has agreed to invest around $12 billion to pick up around 60 per cent stake in Flipkart, in a mix of primary and secondary deals.

The world's largest online retailer has been pouring billions of dollars into India to ship goods to shoppers faster, contributing to growing losses internationally.

Walmart's shares ended 1.22 percent lower at $86.34 on Wednesday.

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