Walmart Stores is in advanced discussions to invest as much as $1 billion (Rs 6,647 crore) into Flipkart Online Services, as the two companies battle Amazon in the e-commerce space, according to a person familiar with the matter.
Walmart, the world’s largest retailer, would take a minority stake in Flipkart under the proposed agreement, the person said, asking not to be identified because the matter is private. Final terms of the deal have not been worked out and negotiations are still underway, the person said. Flipkart’s most recent valuation was about $16 billion (Rs 1.06 lakh crore), according to research firm CB Insights. It is the largest online retailer in India, but its lead has been under assault as Amazon steps up investments in the country. Chief Executive Officer Jeff Bezos said in June he plans to spend another $3 billion (Rs 19,936 crore) in India to gain customers in the fast-growing market. A deal with Walmart would give Flipkart additional capital to fight back and more expertise in battling the e-commerce pioneer. “If the deal goes through, the competitive intensity between Flipkart and Amazon will shoot up,” said Gautam Chhaochharia, the Mumbai-based head of India research at UBS AG.