Home / Companies / News /  Flipkart rejigs board after PhonePe spin-off

BENGALURU : Flipkart has made key changes to its board even as the Walmart Inc-owned e-commerce firm readies for an initial public offering (IPO) and days after its digital payments firm PhonePe was spun off as an independent entity.

Flipkart Group CEO Kalyan Krishnamurthy will be joining the board along with Keki Mistry, vice-chairman and CEO, HDFC, and two new directors from Walmart - global chief technology officer and chief development officer Suresh Kumar and Leigh Hopkins, executive vice-president of strategy and development for Walmart International.

In an email this week, Krishnamurthy informed employees of the changes, which also include current board members Steuart Walton, Dirk Van den Berghe, executive vice-president of Walmart Asia, co-founder of Makemytrip Rajesh Magow and Rohit Bhagat leaving the board. While Berghe is retiring in March-end, the other three are stepping down. Bhagat has joined the PhonePe board as its chairperson and 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. Mint has reviewed a copy of the email.

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In 2018, Walmart Inc. had acquired a majority stake in Flipkart for $16 billion, valuing Flipkart at $21 billion. Doug McMillion, president and CEO, Walmart had said that it may take Flipkart public in as early as four years after the acquisition was closed.

Steuart Walton, grandson of Walmart founder Sam 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 Committee which will mean that he will continue to be able to be an active sponsor for Flipkart," Krishnamurthy said.

Other existing members on the 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 its Flipkart in the US to raise around $10 billion and is planning to sell around 25% in India’s largest online retailer, Mint reported earlier this month.

The proposed public listing may happen as early as next year on the back of rapid digital transformation in the country that has been further accelerated by the pandemic, 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 to minority investors to sell or pare their holdings.

“While the board restructuring 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 happens," said a person familiar with the development.

The pandemic has pushed millions of new customers from small cities to move to online platforms, boosting sales for e-commerce companies.

Bengaluru-based Flipkart competes with Amazon India and Reliance Industries Ltd, which is ramping up its JioMart e-commerce business to challenge its rivals in the e-commerce space.

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