Big Exit Marks Market Maturity

Walmart announced it had signed agreements to become the largest shareholder in Flipkart. The world's largest retailer would pay $16 billion for an initial stake of approximately 77 per cent in India's largest e-commerce company with a current GMV of $7.5 billion and net sales of $4.6 billion in 2017/18. The sale, one of the biggest e-commerce deals in the world, places a spotlight on Indian start-ups. Thus far, the sector has struggled for lack of exits.

There are three exit options - IPO, acquisition or a big secondary sale. IPOs have been rare (MakeMyTrip, JustDial, Infibeam and BharatMatrimony are some of them). Estimates of secondary sales vary. Indian traditional businesses failed to make big-ticket acquisitions. Now, a top multinational buying the lion's share of Flipkart changes things again. One, it shows that the start-up market has matured. Second, it underlines that multibillion-dollar exits (dismissed as unlikely, earlier) are possible. And finally, it is a reminder that exits don't necessarily have to be via IPOs.

Goutam Das telecom