The comments are significant given that global retail giant Walmart is inching closer to sealing the deal to buy a majority stake in Flipkart for as much as $12 billion, even though rival Amazon is still jostling to turn the deal in its favour.
Tiger Global, Naspers, Accel Partners, IDG Ventures and a few other investors are likely to sell their stakes to Walmart in the transaction.
This could likely be the secondary valuation at which Walmart will invest in Flipkart. Walmart and some Flipkart investors, including Japan's SoftBank Group Corp., are yet to agree on the final details and a deal could take at least a month to be signed, the report said.
The deal is expected to have Walmart buying a controlling stake of around 55 per cent in the Bengaluru-based company for a valuation of around United States dollars 20 billion.
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The latest developments suggest that there has been a divide at the top of Flipkart with the two co-founders taking opposite sides in deciding the future of Flipkart, the TOI report further said adding that Sachin's continuation would become untenable if the proposed deal with Walmart goes ahead. While Kalyan Krishnamurthy will continue as Flipkart's CEO, the company's founder, Sachin Bansal will probably be stepping down. As a part of the deal, Flipkart has bought back over 1.8 million shares worth more than $350 million from minority investors.
Walmart's investment would give Flipkart not just additional funds to fight Amazon, but also arm it with a formidable ally with extensive experience in retailing, logistics and supply chain management. "Walmart is insistent on retaining only one of the two founders as they fine-tune the deal, said a Times of India report quoting people familiar with the negotiations".
"Walmart may look at bringing in its own private labels via Flipkart to the Indian consumers".
Alphabet Inc. may be contributing $3 billion to the investment. It is quite a smart strategy by Walmart to take on Amazon. Any Flipkart-Amazon deal would have come under the scanner of the competition watchdog given their dominant market share - around 70 per cent collectively - in the Indian e-commerce market. It will also be one the biggest acquisition deals by Walmart.