Yahoo Finance Live’s Julie Hyman and Brian Sozzi discuss reports that Walmart’s Flipkart is raising its valuation to $60-$70 billion.

Video Transcript

JULIE HYMAN: Move on to another story that we're watching, though, Soz. And it has to do with Walmart and its investment Flipkart, the big Indian e-commerce company and its plans to take it public. It seems like it's going to be a little bit later, but man, could this be a big valuation for that company.

BRIAN SOZZI: And I would say it is a big grand slam for Walmart CEO Doug McMillon. Now, in 2018, I remember covering this deal like it was yesterday. He came out, took a 77% stake in Flipkart for $16 billion. Now I say a lot of-- I think a lot of folks on the Street at the time criticized Doug for spending that much money in a company, an overseas company, that wasn't making any money. But he had a vision, and it looks like he's proven right here.

Because at least according to a Reuters report, that valuation is $60 billion to $70 billion now after a few capital raises over the past few years. Now, a source close to the matter tells me this valuation looks a little speculative, but nonetheless, it does, in fact, appear to be somewhat correct. And it looks like it could really help boost Walmart's cash coffers should it decide to unload that stake when Flipkart goes public.

JULIE HYMAN: And let's just be clear here, this is a report from Reuters. This is an exclusive report from Reuters that is talking about this valuation that is now $60 billion to $70 billion. They cite two people familiar with the situation. I believe one of them put that valuation around 60, 65, and the other talked more about as high as 70. So there's a little bit of a range here when we're talking about what this thing could be worth.

Last year, the company raised $3.6 billion in a funding round. So at that time, the valuation was $37.6 billion. So coming public at, you know, 60 to 70 would obviously be a big upside from that. And by the way, Walmart made this investment back in 2018. It bought 77% of Flipkart. It costed about $16 billion, just to give a little more context here. And then it said it could take the company public in about four years.

So that would, in theory, be this year. So it looks like it could be a little bit later than that. We know that the environment for IPOs has been a little cooler thus far in 2022 than it was over the last couple years.

BRIAN SOZZI: Yeah, and I'll note this, too. Look, it comes alongside of Instacart, getting a 40% valuation cut, Julie, to $24 billion. So it's fascinating to see a US-focused company, Instacart, getting a valuation cut, and a company in India growing very, very strongly, just seeing a boost in valuation.

JULIE HYMAN: Yeah, it's interesting. And also, I mean, Flipkart's a lot bigger in terms of its tendrils as well. Beyond e-commerce, it also has a travel site that is done well. It bought, now, a health app also, or I should say, launched a health app. So it's sort of this, I don't know about a one stop shop, but it's got a lot of different services here. So.--