WhiteWolf Posted July 17, 2012 Report Share Posted July 17, 2012 Flipkart needs about $150 million from new investors in the next six to nine months even as bulge-bracket private equity firms remain wary of the online retailer's initial public offering plans in the US—crucial to making handsome return on investments. PE giants like Bain Capital and Kohlberg Kravis Roberts could look at potential investment deal but demand clarity on Flipkart's ability to pull off a public issue, said bankers familiar with the matter. Two existing investors Accel Partners and Tiger Global are unlikely to pump more capital after $100 million follow-on investment earlier this year. Flipkart would be running out of money unless big investors step in the next nine months. The poster boy of India's latest e-commerce wave is limiting cash burn and improving profitability, but that alone won't improve listing prospects. While there is appetite among US domiciled investors for high growth stories like Flipkart, recent negative experiences with offshore structures of Chinese tech companies will cause concern. Flipkart has to be a foreign domiciled (offshore structured) entity for US listing since Sebi regulations ask Indian companies to trade first on local bourses," said Praveen Chakravarty, CEO, Investment Banking and Institutional Equities, Anand Rathi Financial Services. Chinese e-commerce engines which took the foreign domiciled route to US listing have seen their valuations plunge in the past one year. Flipkart with revenue topping $350 million has had negative gross margins till recently, but just slipped into 2-3% profit margins after expanding product catalogue. It wants to boost operating margins to 8-10% in the next one year. Indian market regulator stipulates profitability norms for listing on local exchanges. Flipkart, which invested heavily into backend logistics as a business differentiator, has started controlling runaway costs and letting go some employees. It has more than 5,000 delivery men servicing 45,000 orders daily. "We are a privately held company and hence are unable to comment on investments, margins or ongoing discussions with investors," said a Flipkart spokesperson in response to queries from his newspaper. Last year, General Atlantic Partners walked away from Flipkart being unconvinced about the financial model. Promoters Binny and Sachin Bansal then turned to existing investors for a bail out deal. The absence of big PE investors in Indian e-commerce has been conspicuous with most firms managing to raise only follow-on investments from venture capitalists. Bansals control about 37% of Flipkart equity, while the Accel Partners and Tiger Global together control 48%. Management holds the remaining 15%. This leaves Bansals with little room in discussing a large deal with PEs beating down valuation. Some bankers argue that Flipkart would opt for strategic sale with Amazon a likely acquirer if multi brand retail FDI is allowed. "Most e-commerce start-ups follow 'the last man standing' approach in a potentially large and under penetrated market. But one cannot keep losing money on unit sales," said K Ganesh, a serial entrepreneur with investments in smaller rivals of Flipkart. Avnish Bajaj, managing director, Matrix India, explained that e-commerce in India has a lot going for but most customers are coming in because of the low prices, there are no loyal buyers. "Raising money for the big players won't be an issue but it's the smaller ventures which will find it difficult," argued Bajaj whose fund has invested in Quikr. Anand Rathi's Chakravarty avers that Flipkart's fund raising hinges upon better clarity on its US listing plans. http://timesofindia.indiatimes.com/business/india-business/Flipkart-needs-big-money-to-keep-delivering/articleshow/14966970.cms Link to comment Share on other sites More sharing options...
CodeEvo Posted July 17, 2012 Report Share Posted July 17, 2012 They made minimum purchase amount 300/- for free shipping Link to comment Share on other sites More sharing options...
kemosabe Posted July 17, 2012 Report Share Posted July 17, 2012 Good article Sent from Motorola Defy using Tapatalk 2 Link to comment Share on other sites More sharing options...
AMG Posted July 17, 2012 Report Share Posted July 17, 2012 Amazon will buy Flipkart. More work for just_another_guy Link to comment Share on other sites More sharing options...
Heaven Angel Posted July 17, 2012 Report Share Posted July 17, 2012 They are giving us good service and fast delivery ... and they have BIG variety of products .. Hence, we don't want Flipkart to end up Dead or takeover Link to comment Share on other sites More sharing options...
Lanius Posted July 17, 2012 Report Share Posted July 17, 2012 Yeah they've a big variety of products.I hope amazon takes over flipkart. Link to comment Share on other sites More sharing options...
Heaven Angel Posted July 17, 2012 Report Share Posted July 17, 2012 Homeshop18 doesn't have huge list of games in every platform .. they lack there where flipkart covers it all .. Link to comment Share on other sites More sharing options...
Lanius Posted July 17, 2012 Report Share Posted July 17, 2012 Homeshop18 has a better deal on books while nextworld seems to have a better deal on games and also on nextworld you get reward points on every purchase. Link to comment Share on other sites More sharing options...
Zeehunter Posted July 17, 2012 Report Share Posted July 17, 2012 Nextworld is sh*t I won't let Flipkart die Link to comment Share on other sites More sharing options...
Heaven Angel Posted July 17, 2012 Report Share Posted July 17, 2012 Nextworld have good collection in games but not homeshop18 .. i don't know about books collection maybe homeshop18 is good for that .. but i prefer flipkart .. Link to comment Share on other sites More sharing options...
Big Boss Posted July 17, 2012 Report Share Posted July 17, 2012 What if they go public? Link to comment Share on other sites More sharing options...
MoonStruckHorrors Posted July 17, 2012 Report Share Posted July 17, 2012 nextworld seems to have a better deal on games and also on nextworld you get reward points on every purchase. That is entirely false, atleast for PC Games. And their reward points system is a joke. For instance, Saints Row : The Third nextworld - 499 + 10 Reward points = 10 RUPEES OFF YOUR NEXT PURCHASE OMG! flipkart - 413 GTA IV Complete nextworld - 699 + 14 Reward points = 14 RUPEES OFF YOUR NEXT PURCHASE OMG! flipkart - 578 Link to comment Share on other sites More sharing options...
Zeehunter Posted July 17, 2012 Report Share Posted July 17, 2012 What if they go public? Aren't they already public ?? Read about their IPO in US few months back Link to comment Share on other sites More sharing options...
Big Boss Posted July 17, 2012 Report Share Posted July 17, 2012 Yeah, Nextworld is good when you want rare games not listed on Flipkart. Like when I got TDU 2 long time back or I used 200 off coupon. Flipkart is awesome when it comes to games. Link to comment Share on other sites More sharing options...
Heaven Angel Posted July 17, 2012 Report Share Posted July 17, 2012 That is entirely false, atleast for PC Games. And their reward points system is a joke. For instance, Saints Row : The Third nextworld - 499 + 10 Reward points = 10 RUPEES OFF YOUR NEXT PURCHASE OMG! flipkart - 413 GTA IV Complete nextworld - 699 + 14 Reward points = 14 RUPEES OFF YOUR NEXT PURCHASE OMG! flipkart - 578 That's Right man .. we get good deals in flipkart .. why the hell we want to spend thousands of bucks just to get a 20 rs off on next purchase .. Aren't they already public ?? Read about their IPO in US few months back Guess he means something different Link to comment Share on other sites More sharing options...
RedLotus Posted July 17, 2012 Report Share Posted July 17, 2012 hope the raise the money and stay afloat for many years to come, i imagined them being profitable and loaded with cash Link to comment Share on other sites More sharing options...
Heaven Angel Posted July 17, 2012 Report Share Posted July 17, 2012 hope the raise the money and stay afloat for many years to come, i imagined them being profitable and loaded with cash Raise the money.. Why would they do that .. we also love flipkart for their lesser prices from other online stores They'll think of something to get out of this mess Link to comment Share on other sites More sharing options...
AMG Posted July 17, 2012 Report Share Posted July 17, 2012 Raise the money.. Why would they do that .. we also love flipkart for their lesser prices from other online stores They'll think of something to get out of this mess Raise the money = get the 150 million they want from stock market There is a difference between raise the money and raise the price. Link to comment Share on other sites More sharing options...
Big Boss Posted July 17, 2012 Report Share Posted July 17, 2012 Aren't they already public ?? Listed in India. Link to comment Share on other sites More sharing options...
Heaven Angel Posted July 17, 2012 Report Share Posted July 17, 2012 Raise the money = get the 150 million they want from stock market There is a difference between raise the money and raise the price. Link to comment Share on other sites More sharing options...
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