Markets

Walmart has long-term plans for Flipkart, an IPO isn't one of them

Walmart has long-term plans for Flipkart, an IPO isn't one of them

Smarting from the Vodafone fiasco, the income-tax (IT) department will seek share purchase agreement from Flipkart on the mega $16 billion buyout by USA retail giant Walmart to assess the tax liability and also to find out whether the GAAR provisions can be invoked.

SoftBank Vision Fund invested about $2.5 billion in Flipkart in August past year after a failed attempt to orchestrate a merger with Snapdeal, which was its first bet in the Indian online retail space in 2014.

According to an ET report, a person familiar with Walmart's plans said, "SoftBank can continue as any other investor as it is neither a retailer nor a direct competitor that would give rise to any conflict of interest". Speaking to the Times of India last month, Son revealed that SoftBank was earlier eager to invest in Snapdeal, but the deal did not materialise eventually.

Japanese internet behemoth Softbank is in discussions to pour in around $3 billion in Paytm Mall.

"In line with the Indian government's vision to promote digital inclusion, we are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments", SoftBank Group Chairman and CEO Masayoshi Son said, PTI reported.

In April, SoftBank had invested around Rs 2,600 crore ($400 billion) for a 21 percent stake in Paytm Mall, according to a report in VC Circle.

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Dhoni has hit more sixes than fours (20) in his 393 runs at a strike rate of 163.75, his best in an IPL season ever. By the end of the power play, Chennai Super Kings had already got 53 runs without losing a wicket .

But the talks with Paytm Mall would proceed only if SoftBank make exit from Flipkart. Here, it is worth mentioning that Flipkart is an Indian e-commerce giant. Amazon has so far committed $5 billion to India-$2 billion announced in June 2014, and $3 billion in June 2016.

In the Walmart-Flipkart deal, the revenue department will go through the share purchase agreement to ascertain the goal of investment and the emanating gains. "Walmart will have the majority with or without SoftBank". In some ways however, it's even more of a pain for Flipkart as with eBay pulling the plug on the exclusive agreement they'll have to wait for Walmart to ramp up and Walmart don't have anywhere near the global presence of eBay.

Sources said Walmart had indeed courted SoftBank for buying its shares but the Japanese group has not yet taken a final call on the issue. The bank has not chose to sell its stake to Walmart.

In the Walmart-Flipkart deal, the revenue department will go through the share purchase agreement to ascertain the objective of investment and the emanating gains. However, the news came when SoftBank has not yet made a decision to part ways with Flipkart stakes due to tax obligations and is hopeful of a further increase in Flipkart valuation following the Dollars 16 billion deal with Walmart.

SoftBank will get around $4 billion if it sells its entire 21 per cent stake in Flipkart.


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