Walmart-Backed Flipkart to Postpone IPO, Focus on Profitability in Current Fiscal Year

Walmart Asks Flipkart to Delay IPO Plans, Focus on EBITDA Breakeven

US-based retail giant Walmart has requested e-commerce major Flipkart to put its initial public offering (IPO) plans on hold and instead focus on achieving earnings before interest, taxes, depreciation, and amortization (EBITDA) breakeven before the end of the financial year (FY) 2027, according to sources familiar with the development.

The decision to prioritize profitability over raising fresh capital was made during Walmart CEO and President John Furner's visit to Bengaluru last week, his first trip to India since assuming the role in February. Flipkart has internally set a target of achieving EBITDA breakeven before the end of FY 2027, which effectively means the company will not proceed with its planned IPO or pre-IPO financing round before meeting this target.

Flipkart did not respond to Moneycontrol's queries regarding the matter. This development is the second instance of an India IPO being delayed by Walmart after PhonePe. However, the US retailer is not in a hurry, given its potential to gain billions of dollars in public market listings in India.

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

Walmart currently owns 71.8% of PhonePe and over 80% of Flipkart. The company's market capitalization stands at $1 trillion, with its share price continuing to climb. Over the past 12 months, its share price has risen by 36%, and it currently trades at $132.4 per share.

Walmart's growth in operations in the US, along with its global subsidiaries, particularly Flipkart, has helped the company add billions of dollars to its market capitalization. At the start of 2018, when Walmart acquired Flipkart, its market capitalization was around $300 billion. Today, it has crossed $1 trillion, a staggering $700 billion added in approximately eight years.

Walmart's push for Flipkart to improve its profitability is not new. In April last year, Moneycontrol reported that Flipkart's board had asked group CEO Kalyan Krishnamurthy to reduce monthly cash burn from $40 million to $20 million as the company prepares for a potential IPO. While Flipkart's latest FY26 financials are not available yet, in FY25, the company's marketplace arm, Flipkart Internet, narrowed its consolidated net loss by approximately 37% to Rs 1,494.2 crore, down from Rs 2,358.7 crore in FY24.

However, the focus on profitability comes amid intense competition in the market. Flipkart is currently scaling units such as Minutes, its 10-minute grocery delivery arm, which will require capital as the company competes with Amazon Now, Reliance's JioMart, Eternal's Blinkit, Zepto, Tata's BigBasket, Swiggy's Instamart, and others.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Walmart's demand for profitability will likely result in the Flipkart group choosing to de-prioritize some businesses and spend extra time on others, as well as channeling capital only to areas that are critical.

Flipkart is the leader in e-commerce on a gross merchandise value (GMV) basis, with a market share of 50-60%, according to a recent report from ICICI Securities. Its monthly active user (MAU) base also stood at 220 million, the highest among other players such as Meesho, which had 200 million MAUs, and Amazon, which recorded 150 million MAUs.

The discussions on deferring Flipkart's IPO come at a time when Walmart has seen leadership changes at a global level. Over the last six months, Walmart's CEO Doug McMillon has retired, and the CEO of its international business, Kathryn McLay, has also left the company after a two-and-a-half-year stint. Flipkart CEO Kalyan Krishnamurthy has long enjoyed the trust of both McMillon and McLay.

Flipkart's IPO plans have been delayed several times in the past. It was reported in 2019 that Flipkart was considering a US listing in three years, then in 2021, Walmart's former CFO Brett Biggs said that a Flipkart IPO was still on the cards. In 2022, Flipkart CEO Krishnamurthy said the company's IPO could come out next year, but those plans did not materialize. While the timeline for Flipkart's IPO remains unknown, the company's immediate priority is to achieve operational profitability.