Flipkart Internet, which is the online marketplace unit backed by Walmart, has secured a fund injection of Rs34.62bn ($476m) from its Singapore-based parent Flipkart Marketplace.
This fund injection, which will be done in two instalments, will give a boost to Flipkart, as it aims to cement its position in the growing Indian online retail space, reported Press Trust of India.
The company’s regulatory document filed with Indian Corporate Affairs Ministry reads: “In accordance with the Letter of Offer dated August 14, 2018 circulated by the company for the rights issue of shares, the board of directors of the company be and hereby allot 14,57,598 Class A equity shares for an amount aggregating to Rs 30,07,02,46,740 [Rs 30.07bn] for cash to Flipkart Marketplace Private Ltd Singapore.”
The capital infusion will enable Flipkart to boost its sales in the festive season of Dasara next month. According to management consultancy firm RedSeer, around 20 million people are expected to shop online during this season, which would simply mean sales of approximately $3bn in total. Players such as Flipkart are eyeing to tap a significant share in the sales through heavy discounts and deals.
The festival season is a battleground for the two largest online players in the Indian retail space – Flipkart and Amazon.
Over the last four months, Flipkart’s competitor Amazon has pumped in Rs54bn ($742m) into the Indian unit.
Flipkart also intends to invest approximately $264m in its grocery platform Supermart. This is Flipkart’s second foray into the grocery space, following a failed effort with Nearby, reported Business Today.
With the launch of this grocery platform, Flipkart is aiming to compete with Amazon, Big Basket, and Grofers. Through this concept, it sells its own label and provides discounts every day.