Capital Structure of Flipkart

Submitted by- Akriti Pandey

Introduction-

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Flipkart is an e-commerce organization founded in 2007 by Sachin Bansal and Binny Bansal. The
organization is incorporated in Singapore but is headquartered in Bangalore, Karnataka, India. Sachin and
Binny are graduates of the Indian Institute of Technology in Delhi. He worked at Amazon.com and left his
new organization in October 2007 to work as Flipkart Online Services Pvt. Ltd. As of November 2016,
Flipkart’s current market capitalization is $5.54 billion. Flipkart now has over 33,000 employees. After
delivery, they reported $300 million in GVW sales.
In August 2018, US retail chain Walmart acquired a 77% controlling stake in Flipkart for $16 billion, worth
about $20 billion.

Flipkart is India's leading e-commerce marketplace with over 30 million products spanning over 70
categories including books, media, consumer electronics, and lifestyle. Flipkart with its
Revolutionary services like cash on delivery. Flipkart is the only online player that mainly offers services
like One Day Guarantee (50 cities) and Same Day Guarantee (13 cities)

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Flipkart Shareholding Pattern-
Following the controversy surrounding co-founder Binny Bansal's exit from Flipkart, Walmart quietly
moved forward, increasing its stake in Flipkart from 77% to 81.3%, which it acquired in May for $16
billion.
Other Flipkart shareholders are: Tencent 5.37%, Tiger Global 4.77%, Binny Bansal 4.2%, Microsoft 1.53%,
Accel 1.38%, Iconiq Capital 0.98%, Temasek 0.29% and UBS 0.19%. According to data intelligence
platform Paper.VC.
In May 2018, Walmart announced it was acquiring a 77% stake in Flipkart for $16 billion. This includes
injecting $2 billion into its e-commerce business. Most of the capital injection can increase the stake to
4.3%.
After the Walmart primary, SoftBank Vision is estimated to own 19.08%, Tiger Global 18.83%, Nasper
11.78%, eBay 5.61%, Tencent 5.41%, Accel 5.31%, Sachin Bansal 5, 10% and Binny. A mediocre 4.82%.

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Mergers and Acquisitions-
As of January 13, 2022, Flipkart has reportedly acquired more than 17 companies to date. Flipkart recently
acquired repair and refurbishment startup Yantra on January 13, 2022, to help boost the e-commerce giant's
e-commerce business, thereby strengthening its after-sales service to customers in the smartphone space.
The company has acquired several businesses, including a 100% stake in Walmart India in July 2020,
Upstream Commerce, and other acquisitions of Myntra on September 9, 2018, which it bought in 2014 for
$300. One million; Jabong and PhonePe acquired for $70 million in 2016. In April 2017, eBay announced
the sale of its Indian subsidiary eBay.in to Flipkart, investing $500 million in the business.

In August 2018, Walmart acquired a 77% stake in Flipkart in what was at the time the world's largest online
e-commerce acquisition. The deal closed at $16 billion, an increase of 81.3% later that year.

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Financial Analysis-
After the merger of Flipkart and Myntra in May 2014, stakeholders responded with thunderous applause.
The number of registered users increased by 30.7%, and the number of daily visits increased by 32.6%.
Platform sellers increased by 3.2%, and team strength increased by 16.6%. After the merger, company sales
rose to $1.5 billion. However, the combined financials of the entire company do not look promising. The
company posted a PAT of Rs 8,365.1 crore in 2015 as sales crossed the $1 billion mark. The 300 million
mergers were mainly accomplished through stock swaps.
This private dill is influenced by common private equity investors such as Tiger Global and Accel Partners.
According to the takeover mantra, co-founder Mukesh will join Flipkart’s board of directors.

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Flipkart: YoY Revenue
The Revenue Soars To $3.09 Bn, 68% Jump in losses. Amid huge losses and an ongoing dispute with tax
authorities, Flipkart Group reported a 29 percent year-on-year increase in revenue to $3.09 billion ($198.54
billion) for the financial year ended March 2017, according to reports. However, Flipkart continued to
report a record loss of $1.3 billion ($87.71 billion), a 68 percent increase from the $814 million ($52.23
billion) loss in fiscal 2016.

As reported in Flipkart's financial report, financing costs increased fivefold to $671 million (Rs 4,308
crore), resulting in a loss in fiscal 2017. This was largely attributable to a reduction in the company's
valuation from $15.2 billion in 2015 to $11.6 billion in April 2017.

Further, the gap increases every year as we can see the revenue in FY20 was 34,170 whereas profit is in
losses with -3150. Whereas in FY21 the revenue is 42,941 and loss is in -2445.

Source: ROC Filling

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References-
• https://startuptalky.com/flipkart-success-story/
• https://www.business-standard.com/article/companies/flipkart-india-unit-s-fy18-losses-zoom-
742-in-spite-of-39-rise-in-revenue-118102800636_1.ht
• https://www.thehindubusinessline.com/companies/walmart-raises-stake-in-flipkart-to-
813/article25550934.ece#:~:text=The%20other%20equity%20holders%20in,intelligence%20plat
form%2C%20paper.vc.

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