A few years ago, Flipkart was melting down. Four consecutive markdowns by a mutual fund managed by Morgan Stanley slashed Flipkart’s value to
$5.54 billion in 2016 from $15.2 billion when it last raised capital in 2015. It was worrying time for investors as well as employees with stock ownership plans. But the Walmart deal must have enthused everyone as it valued the company at nearly $21 billion, a windfall for shareholders.
Below is who made how much from the deal:
Walmart’s acquisition has generated one of the largest pools of wealth for employees in India’s corporate history. The deal has lifted the total worth of Flipkart’s employee stock ownership plans, including unvested shares, to $2 billion (about Rs 13,455 crore), according to an ET report. Esops held by about 100 current and former employees of Flipkart are now estimated to be worth more than $1 million. Walmart would offer a 100 per cent buyback of vested shares by Flipkart employees.
The group chairman of Flipkart and the man who co-founded the company a decade ago along with Binny Bansal, will sell his remaining 5.5% stake for about $1 billion (Rs 6,700 crore) and exit the company. However, Sachin is seen to be less than happy, probably due to his sudden departure even though Binny Bansal will stay on. Company insiders say Walmart did not see a role for two cofounders on the board. “Sadly my work here is done and after 10 years, it’s time to hand over the baton and move on from Flipkart,” Sachin Bansal wrote in a Facebook post after the deal was announced. He was conspicuous by his absence as the other leaders of Flipkart and Walmart gathered to announce the blockbuster deal on Wednesday. Binny’s partial sale of stake will bring him $104 million (Rs 700 crore) while his 4.24 per cent stake in the company is now valued at $881 million.
New York-based investment firm Tiger Global Management, Flipkart’s biggest backer since 2010, has raked in $3.3 billion from its total investment of $1 billion in India’s largest online retailer that Walmart has bought. This is the largest investment returns in India’s private equity and venture capital history, after Warburg Pincus’ exit from Bharti Airtel and KKR’s from Aricent, answering long-held doubts on whether investments in Indian startups would yield results.Tiger Global’s remaining 5% stake in Flipkart, after selling about 17% in the company, is worth another $1 billion, based on the online retailer’s estimated worth of about $20 billion following the Walmart deal.
Japan’s SoftBank is expecting returns of about $4 billion as part of the Walmart-Flipkart transaction, chief executive Masayoshi Son said on Wednesday, fetching about 1.5 times its investment of $2.5 billion in Flipkart just nine months ago. SoftBank, which had become the largest investor in Flipkart, is selling its entire stake of more than 20% in the online retailer.
The US venture capital firm will take home $800 million to $1 billion over three rounds of sale for over $100 million invested since 2009. It was the first company in 2008 to invest in Flipkart which was still trying to take off after an year of operation. Accel will retain some of its shares.
Naspers, the South African tech and media conglomerate, gets $2.2 billion for $600 million it invested over several rounds starting in 2012.
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