Walmart restates its commitment to Flipkart following Morgan Stanley report
Walmart has asserted that it remains committed to Flipkart and its India investments despite the changes to India’s foreign direct investment (FDI) regulations and a recent Morgan Stanley report suggesting that it could leave Flipkart.
Despite the introduction of new FDI norms at the beginning of the month, Walmart remains committed to Flipkart after acquiring 77 percent of the online giant for around $16 billion (Rs 1 lakh crore) last summer.
Walmart Executive Vice President and Regional CEO of Walmart Asia and Canada Dirk Van den Berghe said in a statement: “Walmart's and Flipkart's commitment to India is deep and long term. Despite the recent changes in regulations, we remain optimistic about the country.
"We will continue to focus on serving customers, creating sustained economic growth and bringing sustainable benefits to the country, including employment generation, supporting small businesses and farmers, and growing Indian exports to Walmart's global markets."
Questions arose after the global consultancy firm Morgan Stanley published a report on Feb. 4 titled “Assessing Flipkart Risk to Walmart EPS” that read: "an exit [by Walmart] is likely, not completely out of the question, with the Indian e-commerce market becoming more complicated." The report also stated that in order to comply with the new regulations Flipkart may have to remove a quarter of its online products.
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