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SoftBank blinks, agrees to sell Flipkart stake: Report

Sources claim SoftBank may sell Flipkart stake.

Ending weeks of speculations, SoftBank has finally decided to part away its entire 21% stake in Flipkart to U.S. retail giant Walmart, according to people familiar with the matter. Following the sale out, the Japanese investment giant would be making healthy profit of $4 billion over $2.5 billion investment that it invested in the Bengaluru based company last year.

The sale out will also allow SoftBank to heavily invest in Paytm Mall. Last week, Techpluto reported that the Japanese investment giant is planning to invest nearly $3 bn in Paytm Mall. However, owing to conditional cause in Walmart-Flipkart deal, this investment plan could materialize only if Softbank sold its entire stake in the Bengaluru headquartered firm.

The Japanese conglomerate has so far invested $400 million in Paytm Mall and also separately invested $1.4 billion in Paytm’s parent company One97 Communications.

If sources close to the matter are to be believed, the Tokyo based conglomerate’s hesitation in selling stake to Walmart was owing to huge taxation rates imposed by the Indian government.

Flipkart’s stake sale out will make Indian e-commerce battle very interesting

With Softbank reportedly agreeing to sell its entire stake in India’s largest online shopping company, it will now most certainly go ahead and invest in Paytm Mall. This will only make the Indian e-commerce battle more intense, with three well-funded companies taking on each other. However, there is denying that this showdown will be mostly played between Walmart backed Flipkart and Amazon. Paytm Mall, on other hand, may have to play third fiddle at least for some time.

But several experts claim that the Gurgaon headquartered company has all the credentials to give tough competition to Walmart and Amazon. With heavy funding from Alibaba and now SoftBank likely to come on the board, Paytm Mall’s e-commerce ambition is most likely to get a huge boost.

Categories: News
Girish Shetti: A writer with a passion for tech, marketing, and sports, he delivers captivating articles for the tech enthusiasts. Girish’s expertise in technology and startup analysis brings insightful content and the latest trends to our readers. He loves being the ‘first’ to know(and write) all that’s happening in the world of Tech and startups.