Thursday October 24, 2019
Home Business Flipkart Buys...

Flipkart Buys Back Shares Worth $350 mn

The decade-old company had raised a whopping $6.11 billion till date since 2009 through 14 rounds of funding

0
//
Flipkart Buys Back Shares Worth $350 mn.
New e-commerce norms to impact e-tailers: Flipkart. IANS

Indian e-tailer major Flipkart completed another round of buyback of its shares valued at $350 million (Rs 2,275 crore) from its investors, according to its regulatory filing on Thursday.

The Chennai-based business intelligence platform Paper.vc, which sourced the filing from the Singapore’s Accounting and Corporate Regulatory Authority (ACRA), said Flipkart had bought over 18 lakh preferential shares from its institutional investors like Tiger Global, Accel and Naspers.

“The buyback will enable the e-commerce giant to bargain for a favourable deal with the US-based retail behemoth Walmart, which is eyeing a majority or controlling equity stake in it to foray into the multi-billion dollar Indian retail space,” a market analyst told IANS.

The buyback also paves way for the Singapore-registered Flipkart to become a private entity and sell its stake to bidders like Walmart at higher value.

Also Read: Flipkart, ASUS to launch Indian consumer-oriented products

“The company’s valuation is estimated to be $18 billion, which is based on the buyback price paid to investors, including premium,” added the analyst.

The decade-old company had raised a whopping $6.11 billion till date since 2009 through 14 rounds of funding.  (IANS)

Next Story

DPIIT Sends Questionnaire to Amazon, Flipkart on FDI Norms Adherence: Report

The body also said that Prime Minister Narendra Modi should constitute a group of ministers (GoM) to look into the distortions in both e-commerce and brick-and-mortar formats of retail

0
Flipkart Buys Back Shares Worth $350 mn.
New e-commerce norms to impact e-tailers: Flipkart. IANS

After repeated complaints by the Confederation of All India Traders (CAIT) over alleged violation of FDI norms by e-commerce majors, the Department for Promotion of Industry and Internal Trade (DPIIT) has sent a questionnaire to Amazon and Flipkart over their adherence to the norms for Foreign Direct Investment (FDI).

The questions are concerned with their fund flow, business model and inventory management, people in the know of things said, adding that it also asks the names of their respective top five sellers and price list of vendors on these platforms.

Official sources said that the department would look into their replies and then decide whether more clarification is required or any action needs to be taken.

“It is basically related to the complaints of small retailers, and a series of questions have been sent to them which are relevant to understand the allegations which small retailers make about these online platforms which are under FDI,” a source told IANS.

Questions sent to Amazon and Flipkart by IANS, however, were not immediately replied.

Also Read: Uber Eats’ Pickup Feature Now Available for Users in the US

Traders’ body CAIT has time and again approached the government for its intervention regarding the “deep” discounts offered by these platforms during festival sales. CAIT recently sought an independent audit of the business models of both Amazon and Flipkart on the charges of predatory pricing and deep discounting, among others.

amazon, one-day delivery
An Amazon Prime Truck is on the Road in Virginia, transporting thousands of items ordered from online giant Amazon. (D Bekheet/VOA)

The move by DPIIT comes after Commerce Minister Piyush Goyal last week warned of strict action against e-commerce companies if they were found violating India’s e-commerce policy.

In a related development, CAIT on Sunday alleged that not only the e-commerce companies, but even large number of brands in mobile, FMCG, electronics, electrical appliances, footwear, garments, gift articles, watches and other segments as well as several banks are also responsible for distortion of prices of different products on online portals.

“It is apparent that these brand-owning companies are also exploiting the offline market being hand in glove with e-commerce companies having separate price policy for both online and offline markets which is a clear violation of the Competition Act,” CAIT said in a statement.

It also criticised the banks which give cash back and different types of discounts for purchasing goods from e-commerce portals by making payments through their respective credit or debit cards.

The body also said that Prime Minister Narendra Modi should constitute a group of ministers (GoM) to look into the distortions in both e-commerce and brick-and-mortar formats of retail. (IANS)