Flipkart spent $1.1 billion from February to July, shows Walmart filings

E-commerce firm Flipkart spent $1.1 billion from February 1 to July 31, according to parent company Walmart’s filings with the US Securities and Exchange Commission (SEC).

“As of July 31, 2022 and January 31, 2022, cash and cash equivalents of $3.5 billion and $4.3 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions,” said Walmart in its report for the July quarter.  “Of the $3.5 billion at July 31, 2022, approximately $1.1 billion can only be accessed through dividends or intercompany financing arrangements subject to approval of the Flipkart minority shareholders; however, this cash is expected to be utilized by Flipkart."

This amount was $2.2 billion as of January 31, 2022 according to the annual report filed in March. Walmart makes regulatory disclosures of cash and cash equivalent for Flipkart in its filings to the SEC.

The cash spent by Flipkart includes its spending on mergers and acquisitions, capital expenditure, and working capital requirements for the e-commerce platform as well as fashion arm Myntra and payments platform PhonePe. This also includes Flipkart's investment in its supply chain as well as data centres.

PhonePe recently said that it has completed three steps to move its domicile to India. PhonePe has in the past year moved all businesses, including insurance and wealth broking, and subsidiaries of PhonePe Singapore to PhonePe Pvt Ltd-India. The move also marked its separation from the Flipkart Group.

Flipkart has been on an acquisition spree from the past one year. Last year in November,  Flipkart Group forayed into the healthcare sector through acquisition of Sastasundar Marketplace Limited which owns and operates SastaSundar.com, an online pharmacy and digital healthcare platform. In December last year, Flipkart India and Walmart,tannounced a fresh round of joint strategic investment of $145 million in supply chain tech firm Ninjacart, which is focusing on India’s fresh produce market to organise the agriculture ecosystem.

This year it acquired ANS Commerce, a full-stack e-commerce enabler that helps brands sell online. It also acquired Yaantra, an electronics recommerce company, to strengthen its recommerce business and enhance after-sale offerings for its customers in the smartphones segment.  In March 2022, Flipkart disclosed a capital infusion of over $800 million into its marketplace business, healthcare and fashion business Myntra. 

Flipkart has undertaken several marquee M&A transactions such as Myntra, Walmart India, PhonePe, and Cleartrip, as well as cutting-edge technology companies such as Upstream, Liv.ai and Scapic. This strategy is helping it to tap new areas of business, get access to innovation and compete with players such as Amazon, Reliance’s JioMart and Tata-backed BigBasket.

The firm has also has been an active investor in the ecosystem and has a portfolio of investments in many companies, which include startups such as Ninjacart, Shadowfax and Blackbuck, as well as established corporate entities such as ABFRL and Arvind.

These investments are helping the firm to capture the retail market in the country. With the conclusion of Festive Sale 1, the online retail platforms have seen a robust 27 per cent year-over-year growth, clocking a sale of $ 5.7 billion ( Rs 40,000 crore), according to the report by consultancy firm Redseer. It said Flipkart Group maintained its leadership position with a 62 per cent market share in terms of GMV during the first week of the festive season as well as the 49 per cent share in terms of order volume. The firm is also focusing on scaling up its new businesses this year, including healthcare, travel and hotels.