Why Walmart would rather keep Flipkart private, for now
Over the past few weeks, much has been written about former employees of the online commerce company writing to Walmart's board, asking for liquidity on the stock options they were granted 10 to 15 years ago. On October 1, at least eight former senior executives, among them former Myntra CEO Mukesh Bansal and former chief business officer Ankit Nagori, wrote to Walmart chairman Gregory Penner,…
In the world of technology and commerce, Walmart has shown a preference for maintaining Flipkart as a private entity for now. This stance emerged in light of inquiries from former employees of the online retailer, seeking liquidity on the stock options they received a decade ago. The letter writers included former executives such as Mukesh Bansal and Ankit Nagori, who once led Myntra and Cleartrip respectively.
On October 1, eight former senior executives sent a letter to Walmart's board, Walmart chairman Gregory Penner, and Flipkart Group CEO Kalyan Krishnamurthy, requesting a complete exit for all vested options. Subsequently, a collective representation was made by former employees of various Flipkart group companies, including Myntra, Cleartrip, Shopsy, and others.
Walmart's hesitancy in pursuing an IPO for Flipkart stems from several factors. First, the company is currently under new leadership at Walmart, with Doug McMillon retiring and John Furner taking over as CEO. Moreover, Walmart has mandated that Flipkart achieve EBITDA breakeven by the end of fiscal year 2027 before considering a listing or further fundraising.
Secondly, a listed Flipkart would be subject to quarterly scrutiny, similar to Amazon, which discloses its Indian entity's financials only in annual filings. This transparency could prove challenging for a company that has yet to stabilize its losses. Additionally, Walmart aims to prevent the loss-making Flipkart from becoming a significant liability in the public markets.
The group's financials, as reported in its first consolidated accounts since the reverse flip, show a revenue increase of 18% to Rs 1,45,880 crore in FY26, but the net loss only marginally narrowed to Rs 8,468 crore. The marketplace business, particularly Flipkart's operating revenue, reported a decline of 19% to Rs 16,295 crore, with losses more than tripling to Rs 5,498 crore. Myntra, the only profitable unit, reported a net loss of Rs 579 crore on declining revenue.
Walmart is cautious about the IPO's pricing, having previously invested in PhonePe, a payments and financial services company. As Flipkart continues to spend heavily on quick commerce, Walmart remains patient, waiting for the company's financials to improve before considering a listing.
Written by urgent.news from Economic Times Tech's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
