Walmart wants to pick up a controlling stake in the Bengaluru-based firm, valuing it at around $18-20 billion. | Photo: Reuters
is trying to shed the flab that it has accumulated in the form of step-down subsidiaries, ahead of the Indian e-commerce
firm’s proposed acquisition by US retail giant Walmart.
According to a source close to the development, businesses with similar functions would be merged to form one entity. This, the source said, was being done so that the new parent company would not have to spend on multiple companies for the same purpose.
wants to pick up a controlling stake in the Bengaluru-based firm, valuing it at around $18-20 billion.
Digital Media Private Limited is being merged with Instakart. Another step-down subsidiary, Flipkart
Logistics Pvt Ltd, will also be merged with one of Flipkart’s group companies.
Sources said with these mergers, nothing much would change, except that entities would be merged with group companies. Workforce would continue to remain as it was, said insiders. Both these matters are pending with the National Company Law Tribunal (NCLT) for approval.
Ltd had bought back its logistics business from WS Retail Services, the largest seller on this platform, in June 2015. The acquired entity started running as Instakart Services Private Limited. Flipkart
targeted this transaction with the intention of an initial public offering (IPO).
WS Retail was owned by Flipkart
co-founders Sachin Bansal and Binny Bansal, both of whom were also on its board, until September 2012. The Bansals sold their stake in WS Retail to former OnMobile Global Chief Operating Officer Rajeev Kuchhal.
While the Bansals left the company after the stake sale, two of Flipkart’s early employees, Sujeet Kumar and Tapas Rudrapatna, both of whom are considered to be close to the Flipkart
founders, controlled roughly 46 per cent of WS Retail. Subsequently, both left.
Instakart, incorporated in June 2015, has authorised share capital of Rs 40 billion and its paid-up capital is Rs 12 billion.
Digital Media is a company incorporated on November 3, 2010 with the Registrar of Companies (RoC), Delhi. Its authorised share capital is Rs 66 million and its paid-up capital is Rs 64 million. Flipkart
India Private Limited’s directors, Rajiv Sawhney and Sakair Chaudhary, are directors in the company.
Logistics, another entity that is being merged, was incorporated in December 2011. It has authorised share capital of Rs 5 million and its paid-up capital is just Rs 413,435. Flipkart
India’s director Vinod Tulsiraman Giri are among those from the company that are part of this entity.