Flipkart’s IPO in the US could see Walmart exit, Binny Bansal has already begun cashing himself out

• Flipkart is planning an IPO in the US by 2022.
• Co-founder Binny Bansal has also sold a part of his stake in the company for $76.4 million.
• Reports have been doing the rounds about Walmart planning an exit from its biggest investment, because of India’s new e-commerce rules making the market complicated.

Within a year of Walmart acquiring Flipkart, the global giant might exit it as Indian e-commerce player plans to raise money in the US markets.

Flipkart is reportedly heading for Initial Public Offer (IPO) in 2022 in the US, and this might mark the exit of its largest investor, Walmart.

According to the ET report, Flipkart CEO Kalyan Krishnamurthy has already told his senior management to get ready for an IPO, and also aim at achieving profitability.

Cashing out

But it doesn’t stop there. Flipkart co-founder Binny Bansal, who had exited from all operational roles in the company over allegations of personal misconduct, has also sold a part of his shares for $76.4 million, according to filings sourced by paper.vc. Now, Bansal has a residual share of 3.52% in the company, down from 3.85%.

Paper.vc also reported that Bansal had cashed out $159 million during the sale of Flipkart. Walmart had then acquired 77% stake in Flipkart for $16 billion.

Reports have long been doing the rounds about Walmart planning an exit from the Indian retail company. While Flipkart’s latest revenue reports are not in, the company reported a loss of ₹11.6 billion in March 2018. Walmart was also considering to pump in $1.2 billion more to fund Flipkart’s operations.

Earlier in February 2019, Morgan Stanley also warned Walmart about its plans for the India market – the Indian e-commerce market was becoming “more complicated.”

This report from Morgan Stanley had come after India’s new e-commerce rules which introduced tighter guidelines. As per the new rules, global players like Amazon or the Walmart-Flipkart entity, are barred from selling products from vendors they have own a stake in. Meanwhile, an Indian player which would be exempt from these rules is – Mukesh Ambani owned Jio along with Reliance Retail. It is planning its e-commerce debut which could also threaten the market share of the current players.

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A new government panel is looking at making e-commerce easier in India-- but it may be too soon to cheer for Amazon and Walmart