Future Group CEO may sell 10% stake to global retailer

Future Group CEO may sell 10% stake to global retailer

Future Group CEO may sell 10% stake to global retailer

India's income tax department had told Walmart that it can approach the authorities under Section 195 (2) of the Income Tax Act to determine the withholding tax liability on its proposed purchase of a 77% stake in Flipkart for $16 billion.

The biggest deal in the Indian e-commerce history finally has come to closure.

"A physical retailer buying a digital retailer is an interesting deal".

"That (meeting) is not the most important thing".

Jasani further said the deal could result in retailing alliances locally, potentially influencing sectoral valuations. Sellers have always been at loggerheads with online marketplaces Flipkart and Amazon on several issues including discounts sharing, commission margins, and alleged edge afforded to in-house vendors. The slump was driven by "skepticism about the cost of the deal" as well as the cynicism around whether the deal will really help Walmart gain ground against arch rival Amazon in India, the Wall Street Journal (paywall) reported. It first attempted to enter India's brick-and-mortar retail with an alliance with the Bharti group in 2007.

The JV envisaged opening B2C stores, regulations permitting. Today they have 21 "Best Price" stores across nine states.

"We understand it is not just an e-commerce business - Flipkart, Myntra, Jabong and the fashion business, PhonePe, EKart. Soft-Bank's fund is registered in Jersey [USA] and they are suffering a huge tax liability because there is no DTAA protection with Jersey", said the source. "Future Retail Ltd is leading the industry consolidation in the Hypermart and Supermart format and has acquired Bharti Retail, Heritage Fresh, HyperCity retail etc.in the past few years", Prabhudas Lilladher said in a note on 9 May. Titan and Shoppers Stop have remained flat.

"eBay has notified Flipkart and Walmart that it intends to sell its holdings in Flipkart, which will represent gross proceeds of approximately $1.1 billion".

Kumar says the government has put a concerted effort in easing foreign direct investment, which has made India's market suddenly more accessible.

Furthermore, in light of the Flipkart-Walmart deal, there are chances that Flipkart might introduce a wider range of products with Walmart's backing. The stock lost almost $8 billion in market value on Wednesday and another $1 billion on Thursday.

The BBC said Walmart is betting on the fact that India's e-commerce market, estimated at US$38bn in 2017, is expected to grow up to US$200bn by 2027 as the number of Indians using smartphones and the internet increases rapidly in the next decade.

"Online groceries would be where Walmart-Flipkart and Amazon would start focusing going forward", CMR said. Sachin Bansal, who is exiting the company, held a 5.10% stake in the company.

Collateral damage or fringe benefit? . But mom-and-pop stores might have an opportunity to ride the boom.

McMillon said the Flipkart acquisition notwithstanding, the retailer plans to continue running its cash-and-carry business and expand it further. "In the long run, it can trigger consolidation or strategic tie-ups between online and offline players; Amazon-Shoppers Stop is an example", IDFC Securities noted.

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