SoftBank confirms it’s selling 22% in Flipkart

Mumbai, May 23: Japan’s SoftBank will sell its entire 22% stake in Flipkart to Walmart, bringing to an end the uncertainty surrounding its stance on the sale of its shares in the homegrown etailer. SoftBank’ $2.5-billion investment in Flipkart made through the Vision Fund, less than a year ago, would fetch it $4 billion when fully sold.
A company spokesperson said, “SoftBank confirms the sale of its entire stake in Flipkart to Walmart.” The person did not elaborate on the date by which the transaction is expected to be formalised.
It was earlier 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 entail short-term capital gains tax if the transaction takes place within 24 months of purchase of shares.
Masayoshi Son, the founder and CEO of SoftBank, had been undecided till now about exiting Flipkart, as TOI reported first in its May 11 edition. The US retail giant Walmart picked up a 77% stake in Flipkart, including what SoftBank held in the Bengaluru company, valuing it at around $21 billion. But a day later, it was learnt that the Japanese group was still in discussions with Walmart to “determine its role in Flipkart going forward”.
Though SoftBank’s Son had inadvertently announced — even before the deal was officially unveiled by Walmart and Flipkart — that the fund had exited the Indian company, he changed his mind a day later.