SoftBank has agreed to sell its entire 21% stake in Flipkart to Walmart
May 22, 2018, 14:12 IST
- SoftBank to sell its entire stake in Flipkart for a profit of $1.5 billion.
- The company is also looking to invest about half a million dollars in Paytm Mall.
- Tencent will be the largest minority stakeholder once SoftBank exits Flipkart.
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SoftBank, the Japan-based telecom and internet giant, has finally agreed to sell its 21% stake holdings in Flipkart, a report in The Economic Times said. The same report also said that the company is ready to work out the tax issues that were delaying the share sales. The company headed by Masayoshi San earlier was uncertain on selling the stocks. The company that invested approximately $2.5 billion in Flipkart in FY16 through its Vision Fund, is expected to make $4 billion in stock sales.
According to reports, SoftBank was considering not selling the Flipkart shares due to many options, mainly due to the tax issues related to short-term capital gains. Another reason could be that SoftBank saw a potential valuation increase in Flipkart. Currently, Flipkart has a valuation of close to $21 billion.
Some reports said that the Japanese business giant is also looking for investments in other Indian startups. The company has also held early discussions to invest more than $500 million in Paytm Mall until 2020. After SoftBank exits Flipkart, the investments in Paytm and associates will collectively make it the company's largest gamble in the country. The company also holds shares in other Indian startups such as Ola and Oyo.
Earlier this month, on May 10, Walmart announced that it will acquire 77% of the e-commerce site Flipkart, making it the biggest deal involving an e-commerce site. As of now, India is witnessing a battle on the e-commerce grounds between Amazon, Walmart and China’s Alibaba. Amazon India is now valued at $16 billion according to recent reports.
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