(ATF) The frenzy of a stock market listing via special purpose acquisition companies that has gripped the US seems to be catching on in India too, with an e-commerce giant reportedly trying to throw its hat in the ring.
Walmart-owned Indian e-commerce giant Flipkart is exploring going public in the US through a deal with a blank-check firm, according to reports by Reuters and Bloomberg on Thursday, although a traditional stock market listing is much more likely.
The talks for a deal with a special purpose acquisition company (SPAC), however, are at a very early stage and could fall apart as no plans have been finalized yet, Reuters said, quoting unnamed company sources.
But a Walmart spokesperson said that no decision has been made. “We have been clear that we support an IPO for Flipkart, but we have not made any decisions on timing, listing venue or methodology,” a spokesman for Walmart was quoted as saying.
Walmart acquired a roughly 77% stake in Flipkart for about $16 billion in 2018 and said later that year that it could take the company public in four years.
A growing number of Indian startups are considering the SPAC route to public markets as it involves less regulatory scrutiny and gives companies more certainty over the valuation that will be attained and the funds that will be raised.
India’s largest renewable energy firm ReNew Power struck a deal with a blank-check company last month to go public in the United States, while SoftBank-backed online grocery startup Grofers has also held talks with SPACs.
At least a dozen more Indian tech and internet startups are expected to choose that route to the public markets over the next 6-12 months, investment banking sources said.
Flipkart, which competes with Amazon.com’s local unit and India’s Reliance Industries, has already started talks with investment banks for its listing plans, reports said.
Bengaluru-based Flipkart, started preparatory work last September for an initial public offering overseas as early as 2021, which could value the firm at as much as $50 billion.
Flipkart could seek a valuation of at least $35 billion in a SPAC transaction, the reports say.
With reporting by Reuters