Flipkart has raised INR 466 Cr from two Singapore-based subsidiaries
The funds are expected to help Flipkart mitigate revenue impact
Currently, Flipkart is delivering groceries only
Singapore-based subsidiaries of Walmart-owned ecommerce major Flipkart has infused INR 466 Cr in Flipkart Internet, the arm which manages ecommerce operations of the company.
According to the ministry of corporate affairs (MCA) filings accessed by Inc42, Flipkart Internet has raised INR 459 Cr from Flipkart Marketplace Private Limited. Also, Flipkart Private Limited has pumped in INR 7 Cr in the Indian subsidiary.
As part of the transaction, the ecommerce major has issued 2,13,929 and 3,469 equity shares to Flipkart Marketplace Private Limited and Flipkart Private Limited respectively. The price per share for the deal stood at INR 21,476 with a nominal value of INR 1.
The latest infusion has come at a time when it’s operational revenue sources have come to a standstill due to the nationwide lockdown, which has barred the delivery of non-essentials. The infusion is likely to help the company stay afloat amid hard times. It might also help the ecommerce major avoid measures like layoffs and salary cuts.
Flipkart took a further hit as its plans to roll back delivery of non-essential products from April 20 wasn’t possible as the government barred delivery of non-essentials by rolling back its previous order on April 19. For now, the company will have to wait before it resumes delivering non-essentials.
Prior to this, Flipkart Private Limited had invested INR 2,838.8 Cr in Flipkart India, the wholesale arm of the company in December last year.
Flipkart’s Grocery Play
While the number of orders has spiked in the grocery delivery segment, competition has ballooned with the entry of new players. Flipkart, currently, is only facilitating the delivery of only essential products like groceries and staples.
In this space, Flipkart’s arch-rival Amazon is also consolidating its position while players like BigBasket and Grofers are continuing their dominance. However, new entrants like Zomato and Swiggy are leveraging their hyperlocal-delivery capabilities to ramp up grocery delivery operations.
Meanwhile, social commerce startup Meesho and ecommerce platform Shopclues have also recently marked their entry in this segment. Given the intensifying competition, Flipkart might utilise the funds to consolidate its position.