Walmart Inc (NYSE:WMT) may be looking to make a major investment in India’s Flipkart.
A recent report claims that Walmart Inc is considering investing $10 billion into Flipkart stock. This would have the retail giant taking a 20% stake in the online retailer. The talks appear to be in the advanced stages, but some of the details may still change before being finalized.
Walmart Inc’s possible investment in Flipkart may be an effort to better compete with online retail rival Amazon.com, Inc. (NASDAQ:AMZN). Amazon has been looking to spread its presence in India lately and plans to use $5 billion to do so. A push back from Walmart through Flipkart may hinder some of its plans.
“Walmart doesn’t have much of a choice in India,” Arvind Singhal, Chairman of retail consultancy Technopak Advisors, told Bloomberg.. “They either have to go it alone or partner with someone else as Indian e-commerce has the potential to become really big.”
If Amazon wasn’t enough of a problem for Walmart, it also has to deal with China’s online retailer, Alibaba Group Holding Ltd (NYSE:BABA). Alibaba has been spreading outside of its home country and one of its next big targets is India.
Flipkart already has several other investors with major stakes in the company. This includes SoftBank with a roughly 24% stake, Tiger Global with a 21% stake and Naspers with a 13% stake. Binny and Sachin Bansal, the founders of the company, also have about a 10% stake in the company.
WMT stock was down 2% as of noon Friday.
As of this writing, William White did not hold a position in any of the aforementioned securities.