Tencent bought stakes worth $264 million in Flipkart
China’s Tencent has bought stakes worth $264 million in Indian e-commerce firm Flipkart from Binny Bansal. After this transaction, Bansal now holds around a 1.84 percent stake in the company. Tencent did this deal through its European subsidiary Tencent Cloud Europe BV which now holds around 0.72 percent stakes in Flipkart. The deal was done last year in October.
Flipkart has headquarters in Singapore but has operations only in India. The transaction took place in Singapore, still, the company informed Indian authorities about it. Indian government brought press-note 3 during the pandemic in April 2020 to avoid opportunistic takeovers. This requires all investments from the land-bordering countries a security clearance.
Even if Tencent is a Chinese company, the Tencent-Bansal deal doesn’t fall under Press Note 3 because Flipkart is a Singapore-registered entity and Tencent’s stake is less than 1 percent.
“Tencent is an early investor in Flipkart and this transaction happened last year when SoftBank along with various sovereign funds invested $3.6 billion in Flipkart,” said a person familiar with the matter. “That time Binny Bansal diluted some of his stakes to Tencent.”
Flipkart was valued at USD 37.6 billion after it raised USD 3.6 billion in funding led by Singapore’s sovereign wealth fund GIC, CPP Investments, SoftBank Vision Fund 2, and Walmart. Several other notable investors also took part in the funding round. The Tencent-Bansal deal took place soon after the funding round.