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    Flipkart cash burn at $1 billion under Walmart

    ET Bureau

    Story outline

    • Walmart disclosed that Flipkart had $1.2 billion in cash and cash equivalents on its books as of April 30.
    • This is down from the $2.2 billion Flipkart held in August 2018 when the US retail giant invested $16 billion for a 77% stake.
    • Walmart had attributed 77% of Flipkart’s assets to intangibles and goodwill, highlighting the premium it had paid to get a foothold in India.
    BENGALURU: Walmart-owned Indian ecommerce company Flipkart has burned nearly $1 billion since the US retail giant acquired a majority stake in it, regulatory filings showed, as it pushes aggressively to stave off rival Amazon for control of the country’s online marketplace. Walmart last week disclosed in regulatory filings that Flipkart had $1.2 billion in cash and cash equivalents on its books as of April 30, down from the $2.2 billion the Indian company held in August 2018 when the US retail giant invested $16 billion for a 77% stake.

    Of the $2.7 billion in cash globally that Walmart said was not freely transferable to the US, “approximately $1.2 billion can only be accessed through dividends or intercompany financing arrangements subject to approval of the Flipkart minority shareholders,” it said in the regulatory filing. This is essentially cash on Flipkart’s books, which Walmart said would be utilised to fund operations at the lossmaking Indian entity. Flipkart did not respond to ET’s queries till press time Friday.

    Walmart had disclosed in March that Flipkart had $2.2 billion in cash and cash equivalents in August 2018, part of the Indian company’s $24.1 billion in assets at the time of purchase.

    ET reported on March 30 that Walmart had attributed 77% of Flipkart’s assets to intangibles and goodwill, highlighting the premium the US retailer had paid to get a foothold in India’s e-commerce market.

    Flipkart is entrenched in a highstakes battle with rival Amazon, which has poured in close to $5 billion into its Indian entities since 2013. Both companies are burning over $1 billion each year to fund expansion as well as in discounting to attract new buyers.
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