ADQ in talks to infuse $400-500 M in Flipkart: sources

The transaction could value Flipkart between $35-40 billion, sources close to the development said.
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ADQ, formerly known as Abu Dhabi Developmental Holding Company, is in an advanced stage of discussions to pump in about $400-500 million (around Rs 3,000 crore to Rs 3,660 crore) in ecommerce major Flipkart, according to sources.

The transaction could value Flipkart between $35-40 billion, sources close to the development said.

An announcement could be made in the next few weeks, they added.

One of the persons privy to the discussions said that Flipkart could raise about $3 billion or more as there is significant interest from investors.

The ecommerce major is also in discussions with SoftBank Group and some others as investors are keen on tapping into the digital commerce space that has seen significant growth during the pandemic, the person added.

Flipkart did not respond to queries, while comments could not be immediately elicited from ADQ.

Image source: Shutterstock

After its $16 billion investment in Flipkart for a 77 percent stake in 2018, Walmart had led a $1.2 billion funding round in 2020 that valued the ecommerce company at $24.9 billion. Flipkart is also said to be working on launching an initial public offering (IPO) next year.

Ecommerce has seen strong growth in the country amid the pandemic as containment measures introduced millions to the convenience of online shopping, and prompted seasoned online shoppers to buy more.

Social distancing compulsions, massive smartphone base, and reliable broadband have galvanised ecommerce uptake beyond metros, deep into smaller cities and towns.

These platforms are ramping up capacities and hiring to cater to the growth in order volumes.

A fresh infusion of capital will also provide Flipkart with more ammunition to compete against rivals like Amazon and Reliance's JioMart.

In another development, last week, US retail giant Walmart has said it is "open to an IPO" for its Indian ecommerce arm Flipkart but there is "no specific timeline" for the share sale.

Both Flipkart and payment app PhonePe continue to do well, Walmart International President and CEO Judith McKenna said while speaking at the DB Access Global Consumer Conference on June 7.

(Disclaimer: Additional background information has been added to this PTI copy for context)

Edited by Megha Reddy

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