• Breaking News

    9 May 2018

    Flipkart-Walmart deal: Sachin Bansal gets over Rs 6700 crore and exits company, Binny Bansal is the new CEO

    India's largest e-commerce company Flipkart founded by Sachin Bansal and Binny Bansal in 2007 on Wednesday (May 09, 2018) agreed to sell 77 per cent stake to US retail giant Walmart for $16 billion.


    "Subject to regulatory approval in India, Walmart will pay approximately 16 billion U.S. dollars for an initial stake of approximately 77 percent in Flipkart," the two companies announced in a joint statement.

    "India is 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 transformation of eCommerce in the market," said Doug McMillon, Walmart’s President and Chief Executive Officer (CEO) in the statement.

    McMillon is currently in India in relation with the mega deal and is expected to meet government officials as well.

    Commenting on the deal, Biny Bansal, Flipkart co-founder and group CEO added, "This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India."

    Sachin Bansal, who co-founded the company with Binny Bansal in 2007, would be seen exiting the company. Sachin held 5.5 per cent stake in Flipkart which he will sell to Walmart. After the deal, Sachin Bansal is richer by little over Rs 6700 crore. However, both him and Binny Bansal would have to pay an income tax of 20 percent, which is a standard as far as the Indian law is concerned. 

    "With regard to share purchase agreement entered into with India resident entity, Sachin Bansal and Binny Bansal in this case, capital gain would be charged in their hands and they have to pay 20 per cent income tax," Transaction Square Founder Girish Vanvari told PTI.

    With Sachin Bansal exiting the company, Binny Bansal is the new CEO.

    Walmart also planning to invest $2 billion (nearly Rs 13,000 crore) as fresh equity into the company to strengthen its hold on the e-commerce firm.

    Rival Amazon too was reportedly in the race to acquire India's largest e-commerce company, but the Flipkart went for the deal offered by Walmart.

    There had been months of speculation that Amazon and Walmart were planning to buy Flipkart but both had repeatedly declined to comment on the talks.


    Japan's SoftBank is currently the largest investor in the e-commerce company with a 23-24 per cent stake, along with early backer South African media and internet giant Naspers, which together holds 13 per cent. Other investors in the company include New York-based hedge fund Tiger Global, US private-equity firm Accel Partners, China's Tencent Holdings Ltd, eBay Inc and Microsoft Corp.