Walmart has delivered a clear message to Flipkart: profits first, IPO later. The much-anticipated IPO, one of the largest in the new-age tech sector, has been put on hold for now, with Flipkart now targeting EBITDA breakeven before the end of FY 2027. According to reports from Moneycontrol, these plans were discussed when Walmart CEO and President John Furner was in Bengaluru during his first India visit, a few days ago. This effectively means Flipkart will not proceed with its planned IPO or even a pre-IPO financing round before meeting this target. The e-commerce major has internally set this ambitious profitability goal as part of its strategic repositioning under Walmart's ownership.
Walmart currently owns 71.8% of PhonePe and over 80% in Flipkart, positioning itself as a major player in India's digital commerce sector. As reported by Moneycontrol, Walmart's market capitalisation has surged from around $300 billion at the start of 2018 to over $1 trillion currently, adding a staggering $700 billion in market value over eight years. The US retailer's share price has climbed 36% over the past 12 months, currently trading at $132.40 per share. In FY25, Flipkart Internet, the marketplace arm, narrowed its consolidated net loss by approximately 37% to ₹1,494.2 crore, down from ₹2,358.7 crore in FY24.
Flipkart maintains its leadership position in India's e-commerce sector with a market share of 50-60% on gross merchandise value (GMV) basis, according to a recent report from ICICI Securities. The platform's monthly active user base stands at 220 million, the highest among competitors including Meesho (200 million MAUs) and Amazon (150 million MAUs). However, this leadership comes amid intense competition from Amazon Now, Reliance's JioMart, Eternal's Blinkit, Zepto, Tata's BigBasket, and Swiggy's Instamart.
Walmart's push for profitability is not new, as reported by Moneycontrol, with the company having previously asked Flipkart's board to reduce monthly cash burn from $40 million to $20 million in April last year. The focus on profitability comes as Flipkart scales units like Minutes, its 10-minute grocery delivery arm, which requires significant capital investment as the company competes with multiple players in the rapidly expanding quick commerce segment. Walmart's demand for profitability will likely result in the Flipkart group choosing to de-prioritise some businesses and spend extra time on others, while channeling capital only to areas which are critical. This makes Flipkart the second major India IPO to be deferred in a short span, after PhonePe, as Walmart appears to be in no hurry to liquidate its holdings.
The IPO deferment discussions come at a time of significant leadership changes at Walmart globally. According to Moneycontrol, Walmart's CEO Doug McMillon has retired, and the CEO of its international business, Kathryn McLay, also left after a two-and-a-half-year stint. Flipkart CEO Kalyan Krishnamurthy has maintained the trust of both McMillon and McLay, having worked closely with Judith McKenna, who led the $16 billion Flipkart acquisition in 2018 and retired from her international business role in 2023. This is not the first time Flipkart has pushed out its IPO plans - the company was considering a US listing in 2019, then in 2021 Walmart's former CFO Brett Biggs said an IPO was still on the cards, and in 2022 Flipkart CEO Krishnamurthy said the IPO could come out next year.
