Leading global investment banks are wooing India’s biggest e-commerce player, Flipkart, as it contemplates a Wall Street IPO next year.
India’s Economic Times newspaper hazarded today that Flipkart’s IPO would raise at least $5 billion, which would then make it the country’s largest public share offering. At stake for the investment banks are fees of $100 million or thereabouts.
(Meanwhile, India is divesting 10 percent in the state-owned Coal India, the world’s largest coal mining company, for $4 billion this week.)
Multiple sources confirmed that investment bankers from Goldman Sachs, Citigroup and JP Morgan have been visiting Bangalore, Flipkart’s base, for the past three months to present their credentials, engage with the company and build relationships. The company declined comment.
Flipkart which sells hundreds of categories of products to over 20 million registered users, employs 20,000 employees and delivers 5 million shipments every month. Last year, it raised $1.91 billion from investors in three different rounds of financing. Its structure is complex and, thanks to India's complicated foreign investment laws, the startup's holding entity was incorporated in Singapore in end 2011.
Flipkart, which last raised $700 million at a valuation of $11 billion, is still at least a year away from a listing, sources said. Currently, its biggest investors include Tiger Global, Naspers and Accel Partners. There could be at least one intermediate round of funding between now and the IPO. Admittedly, a lot could happen in the interim as India’s e-commerce industry is rapidly changing.
The action in India’s e-commerce space is vigorous, as venture capital firms scour the landscape for the next big bet.
Flipkart itself is growing at a frantic pace, recently sealing a 3.25 million sq feet lease deal with a Bangalore developer to make room for its expansion of the next few years.
