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Vanguard Nets $15 Million Profit Post Flipkart-Walmart Deal

In May 2018, Flipkart-Walmart deal was put down on the papers. It was confirmed that Flipkart was valued at $20.8 billion at that time of the negotiations. All the formalities regarding the Flipkart-Walmart deal are almost done and soon, the deal will officially be sealed and closed at the office of CCI (Competition Commission of India).

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It is in common knowledge that many investors have profited a huge amount from this deal. However, this was confirmed when Vanguard World Fund, the US-based mutual fund investor, who has invested in Flipkart announced that their company has netted a huge profit of $15 million after the valuation jump of Flipkart.

Not only this, Vanguard World Funds further disclosed the information regarding the varying prices of Flipkart shares. In the US SEC (Securities and Exchange Commission) reports, Vanguard World Funds marked their Series G shares at the valuation of $ 155. 3 per share of Flipkart and the series H shares at the valuation of $ 184.5 per share of Flipkart. This means that according to calculations, the Vanguard Series G shares of Flipkart has increased by $ 10.13 million to a total of $4,42,51,000 and the series H shares of Flipkart has increased by $ 4.8 million to a total of $2,10,69,000.

Along with this, figures of Flipkart that were marked in March 2017 have also been disclosed. It was reported that Flipkart had a 68% jump in loses to INR 8,771 crore. This was seen even when the revenue at Flipkart group rose by 29% INR 19,854 crore. And, according to the SEC reports, Vanguard World funds had approximately four lakh shares in Flipkart.

The $20.8 billion valuation of Flipkart was not just beneficial for Vanguard World Funds, but various other investors such as eBay, Naspers, Tiger Global, etc. The Global retailer eBay had invested $500 million for a stake in Flipkart last year and had in return sold its Indian business to it. But, as the new of the Flipkart- Walmart deal started increasing, the global retailer expressed its intention to sell its share in the Flipkart and in return would get gross proceeds of almost 41.1 billion.

Furthermore, after the Flipkart- Walmart deal, the South African-based company Naspers netted a profit of approximately $ 1.6 billion from its 11% stake in Flipkart.

Therefore, it seems that the Flipkart-Walmart deal proved to be fruitful to several companies that that invested in the Indian e-commerce Flipkart.