Walmart (NYSE:WMT) stock is getting a lift in Tuesday-afternoon trading, up more than 1% (the Dow Jones Industrial Average as a whole is up less than 1%) on news that the retail giant is expanding its influence in India.
Two years ago, Walmart bought its way into the Indian e-commerce market with a $16 billion purchase of a 77% stake in local company Flipkart, India's No. 1 e-commerce company, ahead of No. 2 Amazon.com (NASDAQ:AMZN). But as Reuters reports today, Walmart appears to be increasing its control over the company -- even as Flipkart itself increases its efforts to keep Amazon at bay.
Walmart and other, unnamed investors are investing a further $1.2 billion in Flipkart. As the news agency points out, this round values all of Flipkart at approximately $24.9 billion. When Walmart first bought into the company two years ago, Flipkart was only worth about $21 billion -- perhaps even a bit less. Thus, at this week's implied valuation, it would appear that Flipkart has increased in value nearly 20% -- quite a feat considering the state of the retail market globally in the age of coronavirus and the fact that Flipkart experienced a "significant sales decline" as the pandemic took hold in April.
Valuation aside, Flipkart can use the extra cash to compete with Amazon, which is in the midst of a hiring spree in India, where it's adding 50,000 temporary workers to keep up with the demand for socially distanced delivery of groceries and other goods. Flipkart says it intends to use the funds contributed to it for the "development of its e-commerce marketplace as India emerges from the COVID-19 crisis."