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Walmart-controlled Flipkart’s Singapore entity has received an infusion of ₹2,190.64 crore in the form of equity shares allotted on December 4, 2018.
Some 7,45,118 equity shares of a nominal value of ₹1 per share have been allotted to Flipkart Private Ltd, Singapore (formerly Flipkart Ltd) at a premium of ₹29,399 per share, according to company’s filings accessed by paper.vc, a data intelligence platform.
‘One of many tranches’
This is Walmart’s first big infusion of capital into Flipkart after it acquired a majority stake in the latter for $16 billion in May.
The fresh infusion is indication of Walmart’s determination to take on arch rival Amazon outside of its home turf, where the latter leads.
“This is just the first of many such tranches that Walmart will infuse into Flipkart to run operations more efficiently as much of the $16 billion that it paid up for acquiring majority stake in Flipkart would have gone into buying up stakes of other stakeholders,” observed founder of India’s first e-commerce company, K Vaitheeswaran.
The fresh infusion of capital will go into large-scale technology integration with Flipkart across sourcing, merchandising, supply chain, logistics; hiring special talent to drive business forward and to get the entire in-store integration with kirana stores across the country to enable hyper-local grocery deliveries, according to sources in the company.
Cost rationalisation
India’s largest e-commerce firm is going through a make-over with CEO Kalyan Krishnamurthy at the helm. While Walmart has begun the process by laying off 60 per cent of Jabong’s 450 employees, uneasiness prevails at Myntra, which is set to see the exit of key talent who are business heads across all functions of the fashion lifestyle e-tailer. It will not be long before the flab and redundancies at Flipkart — especially in functions such as operations — is targeted by Walmart, which is known for its cost rationalisation strategy.
While co-founders Sachin Bansal exited the company soon after the takeover by Walmart, Binny Bansal resigned from the post of group CEO recently.
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