Walmart deal worries traders big time

Flipkart-Walmart deal an incredible outcome for the company's believers Paytm's Vijay Shekhar Sharma

Hours after Softbank confirmed on Wednesday that Walmart will be purchasing controlling stake in Flipkart, the global retail giant formally closed a $16 billion deal, bringing months of speculation to an end that included rumours of a rival bid from Amazon.

Economic Times also reported that Walmart did not see a role for two co-founders on the board of the ten-year-old company, as the talks progressed further.

Flipkart is leading in the fashion segment through the acquisition of Myntra, Jabong and eBay (Indian wing), the online fashion portals.

While this is Walmart's largest acquisition to date, the retailer's shares dropped four percent in early trade this morning, as Walmart warned the deal would "dent earnings" in fiscal 2019 per share by 25 cents to 30 cents, according to a report by Reuters.

Soon after the deal was announced yesterday, RSS-affiliate Swadeshi Jagran Manch alleged that Walmart was "circumventing" rules for a "back-door entry" into India and sought Prime Minister's intervention to safeguard "national interest".

India's local family-run stores, known as "kirana" shops, have dominated streets for decades but the Flipkart-Walmart deal will have left many wondering what the future holds for them.

Walmart's deal to acquire Indian online giant Flipkart will open up new opportunities for Indian start-ups, according to analysts. After graduating, Sachin moved to Bengaluru to work in an IT services firm.




Walmart president and CEO Doug McMillon said India is one of the most attractive retail markets in the world, due its size and growth rate.

Founded in 2007, Flipkart has led India's eCommerce revolution. We are also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners. "But I'll be watching and cheering from the outside Flipsters, you better continue to do a good job!"

After failing to make a serious dent in other big foreign markets such as China, Brazil, Germany and UK, US retail behemoth Walmart wants India to be its foreign success story. 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.

Although Walmart promises Flipkart employees to employ their own approach to operations, they both will maintain distinct operating strategies. "It is to be noted that nowhere in the world, Walmart has a market place model", he said in his letter. Last year, however, the company's valuation dropped to about $12 billion, and the duo lost their billionaire status.

The Walmart-Flipkart transaction should therefore now "get the regulators to sit up and take notice, given that the principle of FDI not being permitted for FDI in multi-brand retail is there", TP Pratap, co-founder at Qwikcilver Solutions, said in a phone interview.

Wealth managers are making a beeline for individuals who made windfall gains in Thursday's blockbuster Flipkart sale.

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