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Flipkart eyes US listing through SPAC deal: report

India's top e-commerce player seeks war chest for fighting Amazon

Walmart-owned Flipkart and Amazon.com are locked in a tight race for the lead in India's e-commerce market.   © Reuters

NEW YORK -- Walmart-owned Indian e-commerce company Flipkart is reportedly exploring a U.S. listing through a merger with a buyout vehicle, seeking a valuation of at least $35 billion.

The move would give India's online shopping market leader a fresh injection of capital to beat back competition from Amazon.com.

Flipkart has approached several special purpose acquisition companies, or SPACs, through its advisers for a potential deal, Bloomberg News reported Thursday, citing people familiar with the matter.

SPACs are companies that exist solely to raise funds to acquire unlisted companies, with the goal of floating the shares on a stock market. For Walmart, a SPAC deal could put Flipkart on the market faster than a normal initial public offering, since SPACs are typically required to complete the acquisition within two years.

The SPAC considerations are still in the early stages and Flipkart could pursue other options, Bloomberg reports.

Walmart spent $16 billion in 2018 to purchase 77% of Flipkart. The stake includes shares once owned by the SoftBank Vision Fund, as well as $2 billion worth of newly issued shares.

Since launching in 2007, Flipkart has grown with India's fast-expanding online shopping market and now offers roughly 80 million items. The company could realize a valuation of $50 billion when it goes public, or more than triple the Walmart purchase price, according to some estimates.

India's e-commerce market has grown along with the broader economy, and competition among rival platforms has heated up as stay-at-home demand has risen during the coronavirus pandemic.

Flipkart holds a 31.9% market share, data from U.S.-based Forrester Research shows, while Amazon is close behind at 31.2%. Other competitors include Reliance Retail Ventures, a unit of the Reliance Industries conglomerate controlled by Indian billionaire Mukesh Ambani.

Reuters reported in September that Flipkart is laying the groundwork for an overseas IPO as early as 2021.

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