Walmart-owned Flipkart is exploring going public in the US through a merger with a blank-check company as it seeks to quicken its listing process, according to people familiar with the matter.
The Bengaluru-based online retailer has been weighing a US initial public offering (IPO) and it’s now also looking at other options, the people said. Flipkart’s advisers have approached several SPACs, said one of the people, who asked not to be identified as the information is not public. Flipkart could seek a valuation of at least $35 billion in a blank-check transaction, the people said.
A Special Purpose Acquisition Company (SPACs), also known as a "blank check company" is a shell corporation listed on a stock exchange with the purpose of acquiring a private company, thus making it public without going through the traditional IPO process
Deliberations are at an early stage and Flipkart could still explore other options, the people said. A representative for Flipkart had no immediate comment.
The e-commerce firm is joining other Indian firms like online grocer Grofers in exploring a US listing through SPAC deals. ReNew Power last week agreed to merge with a US-listed special purpose acquisition company in a deal that will give India’s biggest renewable power producer an enterprise value of $8 billion.
Merging with SPACs, which are shell companies that raise money from public investors intending to acquire a business within two years, will allow Walmart to take its India unit to market at a faster pace than the usual IPO route. As many as 10 Indian companies could go public through SPAC deals before the end of the year, Utpal Oza, head of investment banking for India at Nomura Holdings Inc, said in an interview.
Flipkart, which is battling with e-commerce arch-rival Amazon.com Inc and Mukesh Ambani’s retail venture for market share in India, started operations in 2007 and now sells 80 million products on its platforms. Walmart acquired a majority stake in Flipkart in a $16 billion deal in 2018.
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