SoftBank finally decides to sell entire stake to Walmart
The uncertainty clears off with Softbank’s final decision to sell off its entire stake of FlipKart to US owned Walmart. This 21% stake will go to Walmart according to the latest deal with FlipKart which was under consideration for so long.
The dilemma to stay invested in the biggest Indian ecommerce player or leave it lasted for long due to the tax SoftBank has to pay on the profit earned by its stake sale of FlipKart. The company’s total investment was $2.5 billion which is fetching $4.5 billion after the sale. The profit of $2 billion is taxable as per the Indian laws as it is liable for 20% capital tax gained. This taxing phenomenon will wipe out around one-fourth of the profit earned by the sale.
One’s sale becomes another buying opportunity. In another report, it was unveiled that Google parent Alphabet Inc. is considering opportunity to buy a minority stake in FlipKart. Walmart and Tiger Global has conducted multiple round of discussions with Google to convince them to invest in Indian giant FlipKart. This could bring growth and business prospects to all. Alphabet was hesitant because of SoftBank’s uncertainty of its stake sale which is now clear.
Now, with clarity on Softbank’s decision to exit FlipKart brings fresh opportunity to Walmart and Tiger Global to convince Alphabet to buy the FlipKart stake.