Sachin Bansal will sell his entire 5.5% stake in the company he co-founded to Walmart, as he departs from the country’s most valuable internet firm, three people close to the matter said. Sachin is set to step down from the Flipkart board as Walmart prepares to invest $12-15 billion in the homegrown web retailer, valuing it at $20 billion, sources said.People close to the development said Sachin was “not aligned with the strategy and operating structure that was being proposed post Walmart coming on board”. TOI had reported in its May 4 edition that Sachin, who is presently Flipkart’s executive chairman, was likely to quit the company with Walmart’s entry. The retail behemoth from Bentonville, Arkansas, will emerge as the largest shareholder in Flipkart with 60-70% stake, which will come through primary and secondary share purchases.
When contacted, Sachin Bansal, did not comment on the reasons for him leaving Flipkart.
A person familiar with the Flipkart-Walmart talks said, “Binny Bansal will stay on as the group CEO and will be additionally appointed as the new executive chairman of the Bengaluru-based e-tailer.” Kalyan Krishnamurthy — Flipkart’s CEO and an ex-Tiger Global executive who is credited with having turned around the e-tailer over the past couple of years — will also stay on but won’t be taking up a board seat.
Sachin, 36, co-founded Flipkart along with Binny, 35, (both are not related) as an online bookstore back in 2007. He had served as Flipkart’s CEO for nine years before taking on the role of chairman in January 2016, and Binny becoming the chief executive. Since then, Sachin has been away from day-to-day operations at the Bengaluru company. For the past year, he had been engaged in launching a private label ‘Billion’ across electronics, appliances and apparel as well as building an artificial intelligence unit for the online retailer.
“Sachin was to stay on till very recently, but there was a disagreement between the Flipkart board and him on strategies being drawn up for the company after Walmart became the largest shareholder,” a person directly privy to the goings-on said. Sachin is likely to make about $1 billion after selling his entire shareholding. Binny, on the other hand, who will keep his board seat, will partially sell his stake, sources said.
Besides Sachin, sources said SoftBank, which is currently the largest investor in Flipkart with a 23-24% stake, along with early backer South African media and internet giant Naspers, which holds 13%, are likely to exit the online retailer completely. Tiger Global, the New York-based investment fund, which has rallied behind Flipkart for years, as its most key shareholder, along with other early investors, are expected to liquidate 70-80% of their shares to Walmart even as plans are afoot to facilitate an IPO for the Indian e-tailer.
From among 50 investors at Flipkart, only Tiger and Tencent are expected to get a board seat each. Another person familiar with the discussions told TOI that Walmart’s 60-70% stake in Flipkart may not be acquired at once as some of the smaller investors are yet to decide on how much they want to sell of their holding in the company.