Walmart may be urged to take Flipkart public

By BLOOMBERG

NEW YORK • Walmart Inc, the world’s largest retailer, could be forced to publicly list its newly acquired Indian e-commerce company, Flipkart Group, within four years at the request of a small minority of Flipkart shareholders, a public filing shows.

Walmart’s US$16 billion (RM63.21 billion) purchase last week of India’s biggest online seller gave the Arkansas-based retailer a 77% stake in Flipkart and a foothold in a country with 1.3 billion people and one of the world’s fastest growing economies. That the purchase of India’s most valuable start-up gave Walmart a leg up over its chief rival, Amazon.com Inc, which has been investing heavily in India, only sweetened the deal.

But whatever euphoria existed among Walmart executives for striking the most expensive purchase in the company’s history could be shortlived.

The deal’s terms give investors controlling as little as 14% of Flipkart’s shares the right to require Walmart to take the Indian company public in as soon as four years, according to the filing.

The investors could demand that Flipkart’s valuation through an initial public offering (IPO) be no less than the roughly US$20.8 billion the company commanded when Walmart bought a 77% stake.

“While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart’s ambition to transition into a publicly-listed, majority owned subsidiary in the future,” Bentonville, Arkansas-based Walmart said last Wednesday, before details of the arrangements were disclosed in the filing last Friday.

The company’s stake in Flipkart could fall below 77% well before a potential IPO, Walmart said, requiring a greater share of other investors to agree to a public listing.

Randy Hargrove, a Walmart spokesman, declined to comment on Saturday beyond the company’s recent statements and filings.