Skip to main content

Market Overview

Walmart Eyes Indian Market With $16 Billion Investment In Flipkart

Share:
Walmart Eyes Indian Market With $16 Billion Investment In Flipkart

Retail behemoth Walmart Inc (NYSE: WMT) made a major push into the India market Wednesday with an investment in Flipkart, India's leading e-commerce platform.

What Happened

Walmart has agreed to buy a 77 percent stake in Flipkart for $16 billion, the companies said in a press release. The Indian company recorded gross merchandise value of $7.6 billion and net sales of $4.6 billion in its recent fiscal year ended March 31.

Walmart and Flipkart will leverage the combined strength of both entities but will maintain distinct operating structures.

Walmart's India operation consists of 21 Best Price cash-and-carry stores and one fulfillment center across 19 cities. Through the investment in Flipkart, Walmart hopes to find new ways of serving its customers with speed and innovation to grow its business in both the Indian market and internationally.

Why It's Important

Walmart's investment in India may also been as a move to counter Amazon.com, Inc. (NASDAQ: AMZN), which has also been making major pushes in the Indian market. Specifically, Amazon has already invested billions of dollars in the Indian market and was reportedly interested in buying a 60 percent stake in Flipkart after Walmart's interest was made public.

What's Next

Walmart's investment in Flipkart is expected to close later this year and Walmart says it will have a negative impact to its fiscal 2019 EPS of 25 to 30 cents. In fiscal 2020, the deal is expected to have an EPS headwind of around 60 cents per share.

Walmart shares were down about 5 percent to $81.42 in Wednesday's pre-market session.

Related Links:

Why Did Facebook Make A $600 Million Investment To Stream Indian Cricket?

Advantages With India ETFs

Image Credit: Walmart Corporate from Bentonville, USA (Walmart store exterior) [CC BY 2.0], via Wikimedia Commons

 

Related Articles (WMT)

View Comments and Join the Discussion!

Posted-In: ecommerce Flipkart IndiaNews Emerging Markets Global Markets Tech Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com