Six years on, Walmart's Flipkart bet is finally looking less like a write-down

When Walmart acquired a majority stake in Flipkart in 2018 for approximately sixteen billion dollars, the transaction was immediately criticised as expensive by investors who watched the US retailer's stock fall on the announcement day and who doubted the strategic logic of buying a loss-making Indian marketplace. Six years later, the verdict is more nuanced - and for Walmart, considerably more comfortable than the early-cycle assessment suggested. Flipkart, led by Kalyan Krishnamurthy, has made substantial progress on its path to profitability since 2018. The marketplace business has improved its take rate, rationalised logistics costs through an expanded Ekart network and reduced its dependence on deep promotional funding that characterised the Snapdeal-Amazon-Flipkart war years. Myntra, the fashion vertical acquired before the Walmart deal and retained within the Flipkart group, has become one of the most important fashion commerce platforms in India, with improving unit economics in both buyer-funded and seller-funded promotional models. The more significant development for Walmart's India thesis has been PhonePe. The payments subsidiary, which was separated from Flipkart in 2022 in the high-profile and expensive redomicile transaction, has become one of India's most valuable financial-services companies in its own right. PhonePe's UPI market leadership, with consistently around forty-five to fifty percent of UPI transaction volume, combined with its rapid expansion into insurance, mutual funds and lending, has created a financial-services platform that many analysts value well above ten billion dollars on a standalone basis. Walmart holds a majority stake in PhonePe through its Flipkart investment structure. The eventual exit path for Walmart's combined Flipkart-PhonePe holding remains the subject of ongoing strategic discussion within the company's leadership. A Flipkart IPO - which has been discussed for years but repeatedly delayed - would be one of the largest Indian internet listings in history. A partial secondary sale to sovereign investors or global private-equity buyers is another option. What is now clear is that Walmart has sufficient flexibility on timing to choose the route that maximises value rather than the one that provides the fastest liquidity. What to watch: any formal signal from Walmart on the IPO timeline for Flipkart, how Flipkart's market share evolves relative to Amazon India and the emerging vertical-commerce challengers, and whether PhonePe is listed separately before or after Flipkart's own exit. The trajectory of Flipkart's adjusted EBITDA over the next four quarters will be the primary metric that determines whether bankers are formally engaged for the long-anticipated listing.

Original source: TechCrunch