Bengaluru: Flipkart India, the wholesale arm of the Walmart-owned ecommerce marketplace in India, has received Rs 1,431 crore in fresh capital from its Singapore-based parent entity Flipkart Private Limited. The fund infusion comes days after the Indian government made clarifications to the FDI policy for the ecommerce industry which will significantly affect firms like Flipkart and Amazon.
According to documents filed with the Registrar of Companies (RoC), Flipkart’s parent entity was issued 4.86 lakh shares in Flipkart India on January 7 at a price of Rs 29,400 per share. The documents, which were reviewed by ET, were sourced from financial data platform Paper.vc.
Flipkart India purchases goods in bulk from manufacturers and sells them to preferred sellers. This model has come under the scanner post the recent changes in FDI regulations for ecommerce companies, as per Press Note 2 issued on December 26, last year. The Department of Industrial Policy and Promotion (DIPP), put out a clarification for the FDI policy for ecommerce, disallowing players such as Amazon and Flipkart from selling products from vendors in which they directly or indirectly have any stake. The marketplaces have until February 1 to comply with the new rules, for which they’ve sought an extension, as reported earlier.
Flipkart had invested Rs 2,190 crore in Flipkart India in December last year, making the new investment highly unusual as the company has previously spaced out its fund infusions in its Indian subsidiaries. Together, the two investments bring the total investment in Flipkart India to over Rs 3,600 crore, or approximately half a billion dollars.The investme Flipkart India gets Rs 1,431 cr in fresh capital from parent entity nt will be the third large fund infusion into Flipkart after Walmart closed to deal to acquire 77% stake in the homegrown etailer for $16 billion in August last year. Flipkart Internet, the marketplace entity of the company had received over Rs 3,400 crore in September last year, ahead of its massive Big Billion Days festive sale.
The development was reported by ETRetail.com