According to a PTI report: The fund infusion — done in two tranches — will provide more ammunition to Flipkart, which is locked in an intense battle with US-based Amazon for leadership in the burgeoning Indian e-commerce market.
“…in accordance with the Letter of Offer dated August 14, 2018 circulated by the company for the rights issue of shares, the board of directors of the company be and hereby allot 14,57,598 Class A equity shares…for an amount aggregating to Rs 30,07,02,46,740 for cash to Flipkart Marketplace Private Ltd, Singapore,” regulatory documents filed with Corporate Affairs Ministry said.
The resolution was passed at the board meeting held on August 30, 2018. The board, during the same meeting, also passed another resolution (in accordance to a Letter of Offer dated July 18) for allotting 2,21,002 equity shares for Rs 455.92 crore for cash to Flipkart Marketplace, Singapore.
The fresh capital also comes close on the heels of festive sale season that not only brings in discounts and deals for customers, but is also an annual showdown of sorts between the two largest players in the segment — Flipkart and Amazon India.
Market watchers expect the competition between the two to be even fiercer this year as both companies have invested significantly through the year to ramp up product offerings as well as logistics infrastructure to ensure speedier delivery.
While Flipkart now has the backing of US retail giant Walmart (via a Rs 16 billion deal signed earlier this year), Amazon India too has received millions of dollar in funding through the year from the US parent across operations like marketplace and payments business.
About 20 million people are expected to shop on various e-commerce platforms during the festive sale next month, translating into sales of around Rs 3 billion for players like Amazon and Flipkart, according to a report by research firm RedSeer.
In a statement Tuesday, Flipkart said it expects to see a surge of 8-10X in sale of perfumes on its platform during the sale season. This growth, it said, would be on the back of an overhaul undertaken by the company.
“Project ‘Authenticated’ promises a revamp of Flipkart’s portfolio comprising over 2000 perfumes and a seal of authenticity on the listing image, a new feature that showcases brand-approved sellers,” it said.
The company will also add more exclusive partnerships and expand its collection of globally recognised labels in coming months, it added. The size of the perfume industry as a whole is predicted to grow 50 percent to Rs 3,000 crore over the next five years, the statement said.