Flipkart, which competes with Amazon in
India's booming e-commerce space, had earlier set an IPO valuation goal of $50
billion, Reuters has reported.
The main reason for waiting for the IPO is
due to Flipkart's internal plan to boost valuations further by focussing on two
of its relatively new businesses —online healthcare services and travel
bookings, two of the sources with direct knowledge said.
Two separate sources familiar with
Flipkart's plans said the ongoing global market turmoil sparked by the
Russia-Ukraine crisis also forced the Indian company to reconsider its
timeline.
Flipkart acquired Indian travel booking
website Cleartrip in 2021, and this week launched a "Health+" app to
offer medicines as well as other healthcare products and services.
"Flipkart thinks there is an even
bigger upside of valuation than originally envisaged. The travel business has
started showing great signs already for them," said the first source.
The first source said the IPO valuation
target could be as high as $70 billion, while the second said it could be
between $60 to $65 billion. Flipkart didn't respond to a request for comment.
Asked about the IPO's timeline, Walmart CFO
Brett Biggs told an analysts conference in December that Flipkart's business
was "performing almost exactly like we thought" and an "IPO is
still very much in the cards", without specifying when the company will
list.
The listing, according to sources, is now
being planned for early-to-mid 2023. Flipkart is incorporated in Singapore and
wants to list in the United States, they added.
The IPO planning comes amid growing
protests from Indian brick-and-mortar retailers that Flipkart and Amazon bypass
federal regulations and favour select sellers, allegations the companies deny.
India is also working on a slew of
e-commerce sector regulations that could spook foreign giants. Walmart acquired
a roughly 77 percent stake in Flipkart for about $16 billion in 2018 - its
biggest deal ever - and said later that year that it could take the company
public in four years.
Just last year, Flipkart raised $3.6
billion in a funding round, giving it a valuation of $37.6 billion.
That fund raising helped bolster the
company's financial position, and it had enough cash right now for expansion,
meaning an IPO wasn't a necessity at this stage, said one of the sources.
India's IPO market has slowed after having
boomed as enthusiastic retail investors and a pandemic-induced flood of easy
money pushed prices to record highs, encouraging a slew of Indian tech
companies like Paytm and Zomato to go public.
More than 60 companies made their market
debut in India in 2021 and raised a total of more than $13.7 billion, which was
more than the previous three years combined. © Reuters