WALMART STAKE IN FLIPKART FALLS TO 75%

Parent Walmart’s stake in Flipkart has dropped to 75 per cent from 83 per cent after the funding last year.

Walmart had acquired a

77 per cent stake in Flipkart in May 2018. Post the subsequent rounds of funding, the stake had gone up to 83 per cent. However, last year, Flipkart had raised a total of $3.6 billion from a bunch of external investors as well as from Walmart. After the funding, Walmart’s equity share has come down.

“During fiscal 2022, the company received $3.2 billion primarily related to a new equity funding for the company's majorityowned Flipkart subsidiary, which reduced the company's ownership from approximately 83 per cent as of January 31, 2021 to approximately 75 per cent,” Walmart said.

Flipkart may further utilize $2.2 billion cash and cash equivalents for its operations this year.

Walmart also said it was not sure whether the Enforcement Directorate’s probe of alleged violation of FDI norms by Flipkart will have any adverse impact on the company's business or cash flows.

The company has received show-cause notice from the ED in July

2021 on the funding received between 2009 and

2015, prior to Walmart’s acquisition of Flipkart.

“While the company does not currently believe that this matter will have a material adverse effect on its business, financial condition, results of operations or cash flows, the company can provide no assurance as to the scope or outcome of any proceeding that might result from the notice, the amount of the proceeds the company may receive in indemnification from individuals and entities that sold shares to the company under the 2018 agreement...or whether the company's business, financial position, results of operations or cash flows will not be materially adversely affected,” it added.