Analysts generally agree that, in the long term, Walmart's WMT, +0.18% $16 billion, 77% stake in Flipkart will help the retail giant gain ground in the growing and increasingly significant market. This brings an end to the era of Sachin Bansal and Binny Bansal in Flipkart.
Although many sellers that TechCircle spoke to are excited about the global market opportunities and sourcing afforded by the Walmart deal, some are equally wary of the United States retailer's global strategy to rebrand and sell white-label products, and to aggressively supply its own private labels.
While previous reports had surfaced that Flipkart investor SoftBank might delay the deal to avoid hefty tax cuts, a new report by The Information speculates that SoftBank is still undecided on selling its stake in Flipkart to Walmart. The transaction, which was officially announced on Wednesday after months of extensive media coverage, has been in the works since 2016.
"As of now, SoftBank has not exited Flipkart". "Son is a big believer in India and thinks that the valuation of the company (Flipkart) can go up further".
It entails Walmart ploughing $2 billion into the company as primary capital.
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The prospective Chief Minister of the BJP also indicated that exit polls that predicted a hung assembly in the state got it wrong. There were reports of malfunctioning of EVMs from some polling stations, and minor clashes between Congress and BJP supporters.
The tax burden of the exit is being attributed as a major consideration for SoftBank, as its investment in the Indian ecommerce unicorn isn't even one year old.
Despite this, super markets and hyper markets continue to be prohibited territory to global companies. "Plans are on track", Walmart India President and CEO Krish Iyer told PTI.
As the hands-on manager, Krishnamurthy has won the loyalty of the rank and file at Flipkart in the last two years and it seems Walmart was keen to have just one CEO controlling things. Sachin Bansal, the other co-founder had quit the company. "Soft-Bank's fund is registered in Jersey [USA] and they are suffering a huge tax liability because there is no DTAA protection with Jersey", said the source.
In this case, apart from domestic income tax laws, articles from a number of income tax treaties signed by India with the US, Singapore, Mauritius, South Africa, and a comprehensive agreement with China will also be invoked.
The report added that Flipakart's remaining shareholders are cofounder and group CEO Binny Bansal (4-5%), Tencent (6%) and Microsoft (1%), while the remaining stake is held by a few small investors and employees. On Thursday, The company truly believing and showing how important India as a market was for them, announced that they will be opening 50 new stores in the next four to five years.