Flipkart owner Sachin Bansal sells out the maximum shares to Walmart

Flipkart owner Sachin Bansal sells out the maximum shares to Walmart

The firm had received more than $7 billion in funding before the Walmart deal and is yet to break even.

Bhubaneswar: Amid RSS-affiliate Swadeshi Jagran Manch opposing the Flipkart buyout, young entrepreneurs from Odisha gave a thumbs up to the jaw-dropping deal which with the USA retail giant buying 77 per cent stake for United States dollars 16 billion (Rs 1.04 lakh crore) in the Bengaluru-based e-commerce company.

Tencent Holdings and Tiger Global remain invested in Flipkart, with Tiger Global having made has made about $3 billion after investing $1 billion in Flipkart Group, according to a person familiar with the matter, who asked not to be named, Bloomberg said in a report.

Flipkart will be listed on Indian stock exchanges as a fully-owned Walmart subsidiary down subsequent years.

"This shows that global companies have faith in the Indian market and they are looking for opportunities to invest", Aditya Manya, vice chairman and president of investment firm Kalpataru Multiplier Ltd., told Anadolu Agency.

Gibson Dunn Hong Kong head Kelly Austin is leading a team representing Walmart on the deal that includes white-collar partners Michael Farhang and Joseph Warin, while leading Indian firm Shardul Amarchand Mangaldas & Co is also advising Walmart on the deal. The board will work to maintain Flipkart's core values and entrepreneurial spirit, while ensuring it has strategic and competitive advantages.

The deal is expected to close later in 2018, subject to regulatory approval.

To finance the investment, Walmart intends to use a combination of newly issued debt and cash on hand. Online sellers on Flipkart are already wary of the operative changes this will certainly bring in its train, especially given its history of killing small businesses to push for its own private labels. Though the bigger question for Walmart would be how to turn Flipkart into a profitable business. Gunderson Dettmer LLP, Khaitan & Co., Allen & Gledhill LLP and Dentons Rodyk & Davidson LLP provided legal counsel to Flipkart.

Krish Iyer, Walmart India's president and CEO, on Thursday told Press Trust of India: "We now have 21 stores and plan to open 50 stores in four to five years". "It is pretty clear that this (deal) is good for customers and would create jobs and help society", he said at a select media roundtable here. "As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market".

Eventually, both quit to launch Flipkart.

In the blog, Accel's partners admitted that they were way off in their original assumption was Flipkart would require around $500 million in additional capital to reach break-even, despite realising that the company would need to be financed in an unprecedented fashion.

Through the deal, Flipkart will leverage Walmart's omni-channel retail expertise, grocery and general merchandise supply-chain knowledge and financial strength, while its technology, customer insights and innovative culture will benefit the U.S. retail giant in India and elsewhere.

In this case, apart from domestic income tax laws, articles from a number of income tax treaties signed by India with the US, Singapore, Mauritius, South Africa, and a comprehensive agreement with China will also be invoked.