US Retail Giant Walmart Buys Out Hedge Fund's Stake To Add Another $1.4B To Its Big Flipkart Bet

Retail giant Walmart recently spent $1.4 billion (₹11,515 crore) to purchase the remaining Flipkart shares from Tiger Global, boosting its stake in the Indian e-commerce startup. This transaction has allowed New York-based hedge fund Tiger Global to make a $3.5 billion (₹28,780 crore) profit from an initial investment of $1.2 billion (₹9,871 crore), according to a WSJ report.

Tiger Global has now mostly cashed out its Flipkart shares.

What Happened? Out of all the Indian startups Tiger Global has invested in, Flipkart was the only one that saw an investment of over $1 billion (₹8,225 crore) from the firm. All in all, Tiger Global has invested more than $6 billion (₹49,359 crore) in Indian startups.

The recent purchase of secondary shares has placed a $35 billion (₹2.87 lakh crore) value on Flipkart. Even though it was valued at $37.6 billion (₹3.09 lakh crore) in 2021, the split from payment startup PhonePe has led to an internal reduction of its worth by around $5 billion (₹41,138 crore).

In 2018, Walmart bought a 77% stake in Flipkart for $16 billion (₹1.31 lakh crore), which decreased to 72% last year according to a market analysis by Tracxn. Before this transaction, Tiger Global owned a 4% stake in Flipkart.

Why it matters? Seen from another angle, Walmart’s over $20 billion (₹1.64 lakh crore) investment in Flipkart shows its commitment to compete with Amazon’s local division, which managed to establish a similar business for less than $7 billion (₹57,596 crore).

Despite a drop in its valuation and the depletion of its capital raised in 2021, Flipkart will likely continue seeking funds, possibly turning back to Walmart to secure most of the financing for its next round.

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