News
Walmart buys Flipkart for $16 billion
NEW DELHI: The American retail giant Walmart has announced it has signed definitive agreements to become the largest shareholder in Flipkart Group (Flipkart).
The investment will help accelerate Flipkart’s customer-focused mission to transform commerce in India through technology and underscores Walmart’s commitment to sustained job creation and investment in India, one of the largest and fastest-growing economies in the world.
Subject to regulatory approval in India, Walmart will pay approximately $16 billion (Rs 1.4lakh crore) for an initial stake of approximately 77 percent in Flipkart, formally Flipkart Private Limited.
The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp. While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart’s ambition to transition into a publicly-listed, majority-owned subsidiary in the future.
“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market,” said Doug McMillon, Walmart’s president and chief executive officer.
“As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market. We are also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners. We are confident this group will provide Flipkart with enhanced strategic and competitive advantage. Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs,” he added.
“This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India,” said Binny Bansal, Flipkart’s co-founder and group chief executive officer.
“While eCommerce is still a relatively small part of retail in India, we see great potential to grow. Walmart is the ideal partner for the next phase of our journey, and we look forward to working together in the years ahead to bring our strengths and learnings in retail and eCommerce to the fore,” he added.
Founded in 2007, Flipkart has led India’s eCommerce revolution. The company has grown rapidly and earned customer trust, leveraging a powerful technology foundation, including artificial intelligence, and emerging as a leader in electronics, large appliances, mobile and fashion and apparel.
In a market where Walmart expects eCommerce to grow at four times the rate of overall retail, and with well-known platforms such as Myntra, Jabong and PhonePe, Flipkart is uniquely positioned to leverage its integrated ecosystem, which is defined by localized service, deep insights into Indian customers and a best-in-class supply chain.
Flipkart’s supply chain arm, eKart, serves more than 800 cities, making 500,000 deliveries daily. In the fiscal year ended March 31, Flipkart recorded GMV of $7.5 billion1 and net sales of $4.6 billion representing more than 50 percent year-over-year growth in both cases. With the investment, Flipkart will leverage Walmart’s omni-channel retail expertise, grocery and general merchandise supply-chain knowledge and financial strength, while Flipkart’s talent, technology, customer insights and agile and innovative culture will benefit Walmart in India and across the globe.
While Walmart and Flipkart will leverage the combined strengths of both companies, they will maintain distinct brands and operating structures. Currently, Walmart India operates 21 Best Price cash-and-carry stores and one fulfillment center in 19 cities across nine states in India, with more than 95 percent of sourcing coming from India, aiding suppliers, creating skilled jobs and contributing to local economies across the country. Krish Iyer, president and chief executive officer of Walmart India, will continue to lead that part of the business.
“Flipkart has established itself as a prominent player with a strong, entrepreneurial leadership team that is a good cultural fit with Walmart,” said Judith McKenna, president and chief executive officer of Walmart International.
“This investment aligns with our strategy and our goal is to contribute to India’s success story, as we grow our business. Over the last 10 years, Flipkart has become a market leader by focusing on customer service, technology, supply chain and a broad assortment of products. With Flipkart and the other shareholders who have come together, we will continue to advance the winning eCommerce ecosystem in India,” McKenna.
With retail changing rapidly, Walmart is actively looking for new ways to serve customers and moving with speed. The Flipkart investment represents a unique opportunity, consistent with the approach of looking for innovative ways to grow domestically and internationally, particularly in markets with significant long-term opportunity. The Flipkart investment transforms Walmart’s position in a country with more than 1.3 billion people, strong GDP growth, a growing middle class and significant runway for smartphone, internet and eCommerce penetration.
Structure, Financial Implications and Other Details
Walmart’s investment includes $2 billion of new equity funding, which will help Flipkart accelerate growth in the future. Walmart and Flipkart are also in discussions with additional potential investors who may join the round, which could result in Walmart’s investment stake moving lower after the transaction is complete. Even so, the company would retain clear majority ownership. Tencent and Tiger Global will continue on the Flipkart board, joined by new members from Walmart. The final make-up of the board has yet to be determined, but it will also include independent members. The board will work to maintain Flipkart’s core values and entrepreneurial spirit, while ensuring it has strategic and competitive advantages.
Closing is expected later this calendar year, subject to regulatory approval.
To finance the investment, Walmart intends to use a combination of newly issued debt and cash on hand. Upon closing, Flipkart’s financials will be reported as part of Walmart’s International business segment. If the transaction were to close at the end of the second quarter of this fiscal year, Walmart expects a negative impact to FY19 EPS of approximately $0.25 to $0.30, which includes incremental interest expense related to the investment.
In FY20, as we look to accelerate growth in this important market, Walmart anticipates an EPS headwind in total of around $0.60 per share, comprised of:
Operating losses of approximately $0.40 to $0.45 per share, assuming minimal tax benefit for losses in the near to mid-term. This amount includes about $0.05 per share related to amortization of intangible assets and depreciation of short lived assets resulting from purchase accounting, which will only last for a few years post-closing.
Interest expense of approximately $0.15 per share.
Given the company’s financial strength, we anticipate the continuation of our current share buyback program while maintaining our strong credit profile.
This investment represents a unique opportunity in a market with significant long-term growth prospects. Walmart is investing in a local leader with strong leadership and a culture of innovation and service, and the company is aligned with a strategic and committed shareholder group focused on serving customers. In the mid to long term, as the business scales and efficiencies are realized, Walmart expects losses to decline and returns to improve.
Partnering to Contribute to India
As Walmart scales in India, the company will continue to partner to create sustained economic growth across agriculture, food and retail. Future investments will support national initiatives and will bring sustainable benefits to the country, including:
Job creation, as plans would create jobs through development of supply chains, commercial opportunity and direct employment.
Supporting small business and ‘Make in India,’ through direct procurement as well as increased opportunities for exports through global sourcing and eCommerce. Among other initiatives, Walmart will partner with kirana owners and members to help modernize their retail practices and adopt digital payment technologies.
Support farmers and develop supply chains through local sourcing and improved market access.
Reduced food waste by improving waste management practices and investing in supply chains, especially cold storage.
NEW DELHI: Yotta Data Services, an end-to-end Digital Transformation service provider, has announced that its state-of-the-art data centre facility, “Yotta G1”, located in GIFT city, Gandhinagar is ready for service (RFS).
The opening of this data center marks the debut of Yotta in Gujarat and progresses the company’s mission to provide digital services in India’s high-growth markets.
G1 is Yotta’s fifth data center facility in the country. It joins four large operational data centers, two of which, at Navi Mumbai and Greater Noida are part of hyperscale campuses. Yotta G1 is uniquely located inside the International Financial Services Center (IFSC) zone of Gandhinagar’s Gujarat International Finance Tec-City (GIFT city).
G1 represents an investment of more than INR 500 cr. over five years across critical non-IT and IT / Cloud / AI compute infrastructure. The data center has a capacity of over 350 high-density racks and 2 MW power (which can be scaled further as per demand). The facility is designed to meet the most demanding digital needs of its customers, who may be located within GIFT City or anywhere in the world, by seamlessly delivering fault-tolerant facility infrastructure, high-performance Cloud compute and storage infrastructure, advanced physical and cyber security, unmatched connectivity, and steadfast sustainability.
For large global enterprises operating in the GIFT City IFSC zone, the G1 data center functions as a potential data embassy, whereby their data stored is subject to the laws and regulations of their home country, thus allowing them to maintain sovereignty over their data, even when stored in India. By storing data in a physically different location, global enterprises can ensure continuity of operations in case of major disruptions within their borders. The data center’s location also ensures compliance with the IFSC regulations, providing businesses in the zone with distinct advantages like free foreign exchange convertibility, a liberalised regulatory environment, and business-friendly policies. It also helps enterprises adhere to IFSC’s compliance requirements, including being mandated to host their data within the IFSC zone.
Commenting on the announcement, Darshan Hiranandani, Co-founder and Chairman, Yotta Data Services, said, “The state of Gujarat, with GIFT City, has been at the forefront of providing a viable and sustainable platform for global businesses to set up base in India. The setting up of the IFSC zone is a further testament to their vision for financial services companies. We are proud to support this vision of the Gujarat government with a state-of-the-art data center within the IFSC zone, providing the latest and best in cutting-edge technologies to help businesses set up and scale their businesses while also adhering to all regulatory requirements.”
Adding to this, Sunil Gupta, Co-Founder, MD & CEO, Yotta Data Services, said, “Yotta’s G1 marks a pivotal milestone in delivering high-end data center, Cloud, AI compute, storage, connectivity and cybersecurity services to enterprises both on a global and local scale in the Gujarat region. Besides serving the domestic enterprises within and outside GIFT City, our data center shall serve as a potential data embassy for global enterprises, enabling them to adhere to their respective country’s laws while offering a dependable and secure locale for offshore data storage.”
G1 data centre stands distinct in GIFT city for being a data center offering more than just colocation services. True to Yotta’s stature as the end-to-end digital transformation partner of choice for enterprises, G1 brings forth a suite of key features, ranging from advanced data security and customised business solutions to an indigenous hyperscale cloud offering, AI-GPU compute offering, state-of-the-art infrastructure, cybersecurity expertise, seamless integration with managed IT services, 24/7 customer support, cost optimisation, and an overall competitive edge.
This announcement follows on the heels of Yotta’s recent launch of its cloud services – Shakti Cloud and Yntraa Cloud. Powered by NVIDIA’s top-of-the-line GPUs, Shakti Cloud is India’s largest & fastest AI-HPC supercomputer, delivering cutting-edge GPU computing infrastructure, platforms, and services, including Infrastructure as a Service, Platform as a Service, and Software as a Service. Yntraa Cloud, on the other hand, is a truly indigenous hyperscale cloud platform at par with global cloud platforms, offering an exhaustive range of cloud products and services.
NEW DELHI: Domestic contract manufacturer Optiemus Infracom has entered into a joint venture with US-based speciality glassmaker Corning International to set up India’s first manufacturing facility for producing high-quality finished cover glass parts for the mobile consumer electronics industry.
The collaboration between both the companies will help expand India’s electronics manufacturing ecosystem, as the Indian government strengthens its Make in India initiative. As a part of the joint venture, the companies strategically aim to set up a world-class manufacturing facility in India, powered by cutting-edge technologies and processes.
Driven by a shared commitment to innovation and technological excellence, this collaboration will pave the way for the manufacturing of “Made in India” finished cover glass parts for use in mobile consumer electronic devices, and other cover glass applications, to meet the needs of next-generation mobile consumer electronic devices.
The joint venture signifies a powerful synergy between Optiemus’s deep domestic industry and manufacturing knowledge of electronics and telecom market and Corning’s globally-acclaimed expertise in advanced glass technology. By combining these strengths, the joint venture aspires to not only establish cover glass manufacturing capabilities and capacity in India, but also to contribute significantly to the creation of jobs and skill development within India’s thriving technology sector, the companies said in a statement.
Ashok Kumar Gupta, Chairman, Optiemus Infracom, said, “It is a matter of great pride for us to actively contribute to the growing manufacturing ecosystem in the country. With this joint venture, initiated in line with the vision of Hon’ble Prime Minister of India of ‘Make in India’ programme and the “Atmanirbhar Bharat” initiative, we are committed to make available world-class high-quality products for global and local brands.”
“Embarking on this new journey, we intend to emerge as one of the top manufacturers of finished cover glass parts for use in mobile consumer electronic devices in the next five years. Our collective expertise in innovation, design, and manufacturing, will provide holistic solutions for the brands,” Gupta added.
NEW DELHI: Chipset maker MediaTek, which claims to power more than two billion connected devices every year, hosted ‘Catch-up with Tech’ in collaboration with handset brand Infinix on August 28 to share insightful and engaging conversations about the new-age smartphones and innovative technologies powering everyday lives.
The meet-up threw the spotlight on the MediaTek Dimensity Auto, Satellite solutions and Generative AI along with an extensive showcase of newly-launched Infinix Zero 30 5G powered by MediaTek Dimensity 8020, Infinix GT 10 Pro powered by MediaTek Dimensity 8050, and Infinix QLED TV powered by MediaTek.
In terms of specs, the Infinix Zero 30 5G is tailored for young storytellers and creators, featuring the first-ever smartphone to deliver 4K 60fps video recording from its 108 MP OIS rear camera and ultra-high resolution 50MP front camera. The Zero 30 series powered by MediaTek Dimensity 8020 is said to be a game changer for the front camera vlogging experience along with being the slimmest curved AMOLED smartphone in the segment with glass and a vegan leather back panel. It also claims to be one of the most premium-looking devices in the segment.
The event witnessed a panel discussion moderated by Anuj Sidharth, Deputy Director Marketing & Corporate Communications, MediaTek and included expert panelists from Infinix, MediaTek and two renowned professional photographers.
“With the fifth edition of Catch-up with Tech, we aim to bring consumers closer to the technology and enable them to make informed buying decisions based on their diverse needs. In collaboration with Infinix, this meet-up is in-line with MediaTek’s vision of technology democratization and making innovative technology accessible to everyone,” said Anku Jain, Managing Director, MediaTek India. “The MediaTek Dimensity 8020 in Infinix Zero 30 5G brings faster displays, brilliant cameras and ultra-fast performance. Further, MediaTek Imagiq technologies enrich the capture experience by combining dedicated AI, imaging processors and accelerators to provide incredible results,” he added.
Anish Kapoor, CEO, Infinix Mobile India, said, “Featuring India’s first 50MP 4K 60 fps video recording, Infinix Zero 30 5G is primed to redefine smartphone imaging capabilities, setting a new standard for the creators and vlogging enthusiasts. Our collaboration with MediaTek has played a pivotal role in shaping our exceptional smartphone portfolio, and the Zero 30 5G stands as evidence of our unwavering commitment to innovation and delivering unmatched experiences to our users. The display and design of the device represent a leap forward in smartphone technology. As Infinix Zero 30 5G hits the shelves, we are positive that our customers will find this new offering as exhilarating as we do, further empowering creators to capture their story like never before.”
Radhakrishnan Chakyat, a photography evangelist, founder and host of Pixel Viilage, said, “Infinix Zero 30 5G smartphone powered by MediaTek Dimensity 8020 chipset has amazing hardware features, an excellent camera, dual-view video mode and is primed for optimal content creation and saves a tremendous amount of editing time.”
Aarzoo Khurana, a wildlife photographer, said, “Over the last few days, I clicked various pictures and recorded a few videos with the newly-launched Infinix Zero 30 5G powered by MediaTek Dimensity 8020, and the experience has been truly inspiring. Infinix’s smartphone’s OIS feature helps content creators click shake-free pictures and the front camera, which is extremely sharp and detailed, enables content creators to click countless selfies.”
