Now, it’s final. SoftBank has confirmed that it would sell its entire 21% stake in Flipkart to Walmart, thus putting an end to the uncertainty surrounding its stance on the sale of its shares in the homegrown enterprise. SoftBank’ $2.5-billion investment in Flipkart made through the Vision Fund, less than a year ago, would now fetch it $4 billion when fully sold.
A company spokesperson reported that “SoftBank confirms the sale of its entire stake in Flipkart to Walmart.” However, the person did not elaborate on the date by which the transaction is expected to be formalized.
Earlier, it had been reported that SoftBank had taken a call to sell its shares two weeks after the Walmart-Flipkart deal was announced. While SoftBank hasn’t specified any reasons for delaying its decision, the tax implication attached to the share sale has emerged as a big hindrance for the group. SoftBank’s stake sale to Walmart would now thus entail short-term capital gains tax if the transaction takes place within 24 months of purchase of shares.
Now, as per reports til May, Masayoshi Son, the founder, and CEO of SoftBank had been undecided till now about exiting Flipkart. The US retail giant Walmart has picked up a 77% stake in Flipkart, including what SoftBank held in the Bengaluru company, valuing it at around $21 billion. But again reports after a day stated that, the Japanese group was still in discussions with Walmart to “determine its role in Flipkart going forward”.
SoftBank’s move to exit Flipkart in just less than a year of it investing in the web retailer leaves it with only a solo bet on Paytm Mall.
So, now, before taking a wager on the market leader Flipkart, SoftBank had backed Snapdeal back in 2014, which ended with the group writing off almost $1 billion invested in the Delhi-based online marketplace. Last year, SoftBank has, in fact, tried orchestrating a Snapdeal sale to Flipkart, which fell through.