Please ensure Javascript is enabled for purposes of website accessibility

Report: Walmart India Unit Flipkart to Launch IPO

By Eric Volkman – Sep 17, 2020 at 6:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This would take place overseas, likely in either Singapore or the U.S.

Flipkart, the prominent e-tailer based in India that is owned by Walmart (WMT -0.35%), is preparing for an initial public offering (IPO). That's according to an article published Wednesday by Reuters, citing "sources familiar with [Flipkart's] plans."

Such a flotation could value Flipkart at $45 billion to $50 billion, say those sources. Apparently the company is considering a listing in either Singapore or the U.S. The former might be easier, as the business is incorporated in the small nation. On the other hand, listing on an American exchange would drop the company into a much wider, and wealthier, pool of investors.

Walmart store signage at night.

Image source: Walmart.

At the moment, Indian regulators are drafting new rules that could allow domestic companies to directly list on foreign stock exchanges.

It was unclear how far along Flipkart is in its quest for an IPO. So far, preparation for a potential listing has occurred mostly internally, according to the some of the article's sources; the company is considering hiring advisors for the project. Other sources claim that Flipkart is already bringing its operations in line with standards mandated by major regulators.

If Flipkart were to launch an IPO that brought in the desired proceeds, Walmart would stand to gain a windfall. It paid only $16 billion for a 77% stake in the company in 2018. That deal was the largest single foreign direct investment into a business in the massive nation, a record it still holds.

Investors seem to like the idea of Walmart's big Indian asset rising precipitously in value. On Thursday, they bid up Walmart's stock by 0.3%, contrasting notably with the pronounced declines of the top equity indexes on the day.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Walmart Inc. Stock Quote
Walmart Inc.
$152.97 (-0.35%) $0.54

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.