Keki Mistry, vice-chairman and chief executive of HDFC; Walmart’s CTO Suresh Kumar; and Leigh Hopkins, executive vice-president of strategy and development for Walmart International, will join Flipkart’s board
Flipkart has made several changes to its board, including naming group chief executive officer Kalyan Krishnamurthy as a director, as Walmart Inc.’s Indian unit readies itself for an initial share sale to take advantage of booming online sales that has boosted valuations.
Keki Mistry, vice-chairman and chief executive of mortgage lender Housing Development Finance Corp. Ltd (HDFC); Walmart’s chief technology officer Suresh Kumar; and Leigh Hopkins, executive vice-president of strategy and development for Walmart International, will also join Flipkart’s board.
The new appointments come days after Flipkart’s digital payments unit PhonePe was separated from the parent as part of steps to take Flipkart public. The pandemic has led to millions of new customers, a bulk of them from small cities and towns, purchasing goods from online platforms for the first time, boosting sales and valuations of e-commerce firms.
In an email this week, Krishnamurthy told staff that the new board members will replace Steuart Walton, grandson of Walmart founder Sam; Dirk Van den Berghe, executive vice-president of Walmart Asia; Makemytrip co-founder Rajesh Magow and Rohit Bhagat, who joined PhonePe board as chairperson .
While Berghe is retiring in March, the other three are stepping down. Magow will take on an advisory role.
“I wanted to also let you know that this new year will see some changes to our board as a number of our current directors will be stepping down after steering us through the first two years following Walmart’s investment," Krishnamurthy said in his email, a copy of which was reviewed by Mint.
In 2018, Walmart acquired a majority stake in Flipkart for $16 billion, valuing the Indian company at $21 billion. At the time, Walmart CEO Doug McMillion said he wants to take Flipkart public in as early as four years after the closing of the acquisition. Steuart Walton had joined the board following Walmart’s investment.
“Steuart has combined his Flipkart duties with those of being a Walmart director, and he is stepping down from the Flipkart board to be able to focus more on these, including his role as chair of the Walmart board’s tech panel, which will mean that he will continue to be able to be an active sponsor for Flipkart," Krishnamurthy said.
The other member on the current Flipkart board is co-founder Binny Bansal, who has also joined the PhonePe board, which has co-founders Sameer Nigam, Rahul Chari and Rohit Bhagat.
Bentonville, Arkansas-based Walmart has hired Goldman Sachs to explore an initial share sale of Flipkart in the US to raise around $10 billion by selling around 25% in India’s largest online retailer, Mint reported earlier this month.
The proposed listing may happen as early as next year on the back of rapid digital transformation that has been further accelerated by covid, Mint had reported in September.
In July, Walmart led a $1.2 billion investment in Flipkart Group, valuing the company at around $25 billion, in its largest fund-raising since its acquisition in 2018.
Walmart now owns an 82.3% stake in Flipkart, with US-based hedge fund Tiger Management, China’s Tencent, Accel Partners and Microsoft Corp., among the other key investors.
The IPO will offer an opportunity for minority investors to sell or pare their holdings. “While the board recast doesn’t have any immediate connection with the IPO planned, it is a good time to build a fresh board well in advance before the listing," said a person in the know.
Bengaluru-based Flipkart competes with Amazon India and Reliance Industries, which is ramping up its JioMart e-commerce business.