Who profited in the Flipkart-Walmart deal | Fusion - WeRIndia

Just a few years ago, Flipkart was on a downhill slope. When it had last raised capital in 2015, Flipkart’s value was $15.2 billion.

It was slashed from $15.2 billion to $5.54 billion in 2016 by four consecutive markdowns by a mutual fund managed by Morgan Stanley.

It was a troubling time, especially for investors and employees who had stock ownership plans. It looked like Flipkart’s situation could only get worse.

However, Flipkart’s deal with Walmart brought everyone’s spirits up again. This deal valued the company at almost $21 billion.

These are some of the groups who profited from Flipkart’s deal with Walmart, and how much each one benefited from it.

Employees have greatly benefited from Flipkart’s deal with Walmart. The Flipkart-Walmart deal has generated one of the largest wealth pools for employees in India’s entire corporate history.

It lifted the total worth of Flipkart’s employee stock ownership plans to $2 billion, or about ₹13,455 crore. This amount includes invested shares.

Tiger Global Management, an investment firm based in New York City, has been the biggest backer of Flipkart since 2010. It invested $1 billion in India’s largest online retailer.

From this investment, Tiger Global has raked in $3.3 billion. This is the largest investment return in India’s private equity and venture capital history.

Tiger Global sold about 17% in the company, leaving the firm with a remaining 5% stake in Flipkart. This 5% is worth another $1 billion.

SoftBank, a Japanese conglomerate holding company, has also benefited from Walmart’s deal with Flipkart.

According to Masayoshi Son, the chief executive of SoftBank, they are expecting returns of about $4 billion from the Flipkart-Walmart deal.

This means that they are fetching around 1.5 times their investment in Flipkart. SoftBank invested $2.5 billion in Flipkart nine months ago.

They have become the largest investor in Flipkart. They are selling their entire stake in the online retailer, which is more than 20%.

Image credit: A Price Tracker Made for Online Shopping in India image by Amit Agarwal is licensed under CC BY 2.0

Image Reference: https://www.flickr.com/photos/amit-agarwal/15290275470