MARKET Cheers Purchase of 77 Per Cent Stake By Walmart In Flipkart For 1.06 Lakh Cr INR

WALMART Inc   headquartered in Arkansas, United States of America, has bought Bengaluru based Flipkart‘s 77 per cent for initial  stake for a whopping 16   billion US dollars equivalent to 1.06 lakh billion INR.Welcoming the historic deal, trade circles in India, said it is the biggest ever merger and acquisition (M& A) transaction this year in India. The international retail giant says in a statement it will support Binny and Sachin Bansal owned Flipkart’s ambition to transition itself into a publicly-listed, majority-owned subsidiary undoubtedly the move is stated to be a giant leap forward in strengthening and popularizing e commerce in India.  The Bansals are former employees of Amaon.Walmart, which is functioning  in the American market since 1962, has inked a  definitive agreement to acquire 77 per cent stake in the Indian 11 years  old  company .The deal will value Flipkart  around 20.8 billion dollars, up from its previous valuation of $12 billion. Of the amount, $2 billion will new equity funding while the rest will be utilised to acquire the stake from existing investors, including Softbank, Naspers and co-founder Sachin Bansal. India is , Walmart says , one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading the transformation of ecommerce in the market,” said Doug McMillon, Walmart’s president and chief executive officer  in the statement.“Our investment will benefit India providing quality, affordable goods for customers while creating new skilled jobs and fresh opportunities for small suppliers, farmers and woman entrepreneurs, he said. Meanwhile, Walmart and Flipkart are in talks with other investors to join in the round as well .If the initiative is successful; Walmart’s stake will be reduced. Alphabet, parent company of Google, is said to be among the investors that is looking to back the Indian online retail giant. Softbank is Flipkart’s largest investor. Masayoshi Son also said the stake of USD 2.5 billion Flipkart is now worth about USD 4 billion in deal. Flipkart was founded in 2007 in Bengaluru by Sachin Bansal which has emerged as the first billion-dollar Indian e-commerce company. Flipkart, sells 8 million products across 80-plus categories and has 100 million registered users, reports Kotak Mahindra owned The Business Standard. Incidentally, since 1962, has expanded across borders and overseas but the U.S. remains the heart of its business “where we continue to test new ideas, learn from our customers and improve our ability to help people save money and live better’, the statement said. Walmart employs more than 1.5 million U.S. associates at more than 5,000 stores and clubs nationwide. Last year, it promoted more than 200,000 people to jobs with more responsibility and higher pay.  In the U.S., the average, full-time hourly wage is $13.79.ASSOCHAM Secretary –General DS Rawat says the valuation of an estimated of $21 billion deal will make the Walmart equity infusion the largest ever FDI into India. The Pioneer reports the two-e-retailers will retain their separate brands.Binny Bansal, co-founder of the Flipkart, will also retain 5.5 per cent of his stake and will be Chairman of the Board.