Welcome to a new edition of Full Stack. This is the place where you’ll find unfiltered commentary on all things technology.
Please keep the bouquets, brickbats and suggestions coming on what you want me to write about. You can reach me at samidha.sharma@timesofindia.com and follow me on X @samidha.
Flipkart was the poster child of India's startup economy, spawning a generation of entrepreneurs and unleashing a new kind of energy in the country before it grew into a large corporation. In the early 2010s, its founders Sachin Bansal and Binny Bansal (not related), both graduates of IIT Delhi, inspired a growing cohort of young engineers from the country's premier engineering schools, the Indian Institutes of Technology (IITs), to take the plunge into entrepreneurship rather than chase that cushy American dream job.
In 2016, I wrote in The Times of India about why Flipkart's success was important for the Indian startup ecosystem, at a time when the fortunes of the entire sector seemed to hinge on whether its biggest company could keep raising money and eventually reward those who had backed it.
A decade on, that is no longer the case, because the ecosystem has produced enough winners of its own, several of them now publicly listed, that it no longer rises or falls with a single company.
But what is striking is that Flipkart finds itself in much the same situation it was in then, with a listing that keeps slipping and losses it has yet to shake off, except that the decision now rests with a parent in Bentonville that appears in no hurry to take it public.
Over the past few weeks, much has been written about former employees of the online commerce company writing to Walmart's board, asking for liquidity on the stock options they were granted 10 to 15 years ago.
On October 1, at least eight former senior executives, among them former Myntra CEO Mukesh Bansal and former chief business officer Ankit Nagori, wrote to Walmart chairman Gregory Penner, other board members and Flipkart Group CEO Kalyan Krishnamurthy, seeking a complete exit for all former employees holding vested options.
Days later, former employees of Flipkart, Myntra, Cleartrip, Shopsy and other group companies sent a collective representation to the boards of Walmart and Flipkart.
Also Read: Forget IPO, cash us out: Flipkart alumni press Walmart again
These employees, who said they joined Flipkart in its early, uncertain years and helped build it into what it is today, have long waited for the company to go public, but Walmart, it appears, doesn't share their sense of urgency. A Walmart spokesperson said the company would examine the issues they raised.
There are a few reasons for Walmart's hesitation.
1. Flipkart is dealing with a new leadership team at Walmart. Doug McMillon, who was Walmart's CEO when it bought Flipkart, retired on January 31, and John Furner who was running Sam's Club and Walmart US, took over.
Earlier this year, Flipkart moved its holding company back to India from Singapore, a necessary step towards a domestic listing, but the IPO was put on hold in May after Walmart CEO John Furner visited Bengaluru, with Walmart asking Flipkart to reach Ebitda breakeven by the end of FY27 before it considers a listing or any fresh fundraising.
Kath McLay, who headed Walmart International, stepped down at the end of January. Flipkart now reports to Chris Nicholas, who took over as president and CEO of Walmart International in February. A chartered accountant by training, Nicholas joined Walmart as deputy CFO in 2018, the year it bought Flipkart, and later served as CFO of Walmart US and Walmart International. He knows Flipkart more than most at the retailer. With a numbers man in charge, a listing is likely to wait until the financials look a great deal better.
2. Quarterly scrutiny which is also tied to Amazon. A listed Flipkart would have to explain every rupee of discounting and quick commerce spends to analysts each quarter, while its biggest rival stays private. Amazon's Indian entities disclose their numbers only in annual regulatory filings, and its parent never breaks India out in its quarterly results.
What makes the caution striking is how much Flipkart now moves the needle for its parent. Walmart International grew 12.8% in the quarter to July, more than twice as fast as the company as a whole, with Flipkart Ads leading a 20% rise in the segment's advertising business.
3. Flipkart is still losing money, and Walmart does not want to take a loss-making company of this size to the public markets. The group's first consolidated accounts since the reverse flip, filed under Flipkart Internet, show revenue rising 18% to Rs 1,45,880 crore in FY26, while the net loss narrowed only marginally to Rs 8,468 crore from a restated Rs 8,646 crore. Flipkart has pointed to an adjusted operating margin that improved to -5.4% from -7.7%, but the marketplace business tells a harsher story. Its operating revenue fell 19% to Rs 16,295 crore and its loss more than tripled to Rs 5,498 crore. Myntra, the only profitable unit in the group in FY25, swung to a net loss of Rs 579 crore from a profit of Rs 548 crore, on revenue that fell 13% to Rs 5,243 crore, as it spent on expanding M-Now, the quick commerce service.
With breakeven set as the bar and no listing date on the calendar, Krishnamurthy is under immense pressure to fix the numbers while still spending to hold ground in quick commerce, where Flipkart Minutes now runs close to 1,200 dark stores.
4. Pricing of the Flipkart IPO may be a worry. Walmart has only to look at its other Indian bet. The case for listing PhonePe is very different from Flipkart's. As a payments and financial services company, PhonePe operates in a regulated business where a public listing brings credibility with regulators and customers. Yet even PhonePe could not get its desired price. It was expecting for around $15 billion but bankers advised it to lower its expectations, and in March it shelved the IPO, citing volatile markets.
Also Read: What led to PhonePe delaying its IPO? Beyond war, valuation a major concern
The internal buyback in July valued Flipkart at $38.2 billion, barely above the $37.6 billion it commanded in 2021. Indian investors reward ecommerce companies that come with a sharp story, as Meesho found when it listed last December at about $5.5 billion and closed its first day near $8.5 billion. A 19-year-old Flipkart, whose marketplace revenue shrank 19% in FY26 and now leans on advertising for about half of it, may struggle to tell one.
Long road to IPO
In 2018, the US retail juggernaut bought a controlling stake in Flipkart for $16 billion, the biggest deal in its history and its boldest bet on India. The etailer has since been led by Krishnamurthy, a former Tiger Global executive and a close aide of Lee Fixel, the investor often called the king of Indian e-commerce for his early bets on the country's consumer internet story.
The company began preparing for an IPO in 2014, when it was barely seven years old. In December that year, it filed to convert its Singapore holding company into a public company, and on January 29, 2015, The Times of India reported that Morgan Stanley, Goldman Sachs, Citigroup and Deutsche Bank were in discussions to lead a US listing that would raise at least $5 billion, the largest public offer by an Indian business at the time, and could value the company at over $30 billion.
Within months, its then chief financial officer Sanjay Baweja said Flipkart would not be ready to list for at least two more years because it was not yet equipped to handle quarterly scrutiny.
Indian public markets, too, were in no shape then to absorb a loss-making consumer internet company of Flipkart's size. That has changed since 2021, as Zomato, Nykaa, Paytm, Swiggy and Meesho have all listed at home.
What hasn't changed are the problems Flipkart faced a decade ago, as Walmart's doubts remain about whether the company is ready to handle life as a listed entity.
Samidha Sharma is Editor - ETtech. She's been covering the tech and new-age digital economy for over a decade, and has had a ringside view of the industry and its people.