China’s Tencent buys stake worth Rs 2,060 crore in Flipkart from Co-Founder Binny Bansal

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China’s multinational technology and entertainment conglomerate, Tencent has recently bought a stake worth $264 million (Rs 2,060 crore) in Flipkart. According to official documents, Tencent bought the stake from Flipkart Co-Founder Binny Bansal through its European subsidiary.

The following transaction was completed on October 26, 2021. It was then shared with the government authorities, further at the start of the current financial year. Binny Bansal now owns around a 1.84% of stake in Flipkart after he part of his share to Tencent Cloud Europe BV. Flipkart, a Sinagpore-headquartered e-commerce company, only has its operations running in India. 

Now, after the transaction, Tencent arm holds around a 0.72% stake in Flipkart. Flipkart is now valued at around $264 million, according to the last valuation of $37.6 billion as disclosed by the e-commerce giant in July of 2021. Around that time. Flipkart had managed to raise $3.6 billion(around Rs 26,805.6 crore) in funding. They raised these funds in a round led by CPP Investments, SoftBank Vision Fund 2, Walmart, and Singapore’s sovereign wealth fund GIC.

Binny Bansal now owns around a 1.84% of stake in Flipkart after he part of his share to Tencent Cloud Europe BV.

A number of other known investors such as Khazanah Nasional Berhad, Qatar Investment Authority, Antara Capital, Franklin Templeton, Tiger Global, and Tencent participated in this round. The deal between Mr. Bansal and Tencent took place right after this round. If sources are to be believed, the transaction took place in Singapore but Flipkart informed Indian authorities as a responsible entity and also to let them know that the transaction does not fall under the purview of ‘Press Note 3’, which calls for scrutiny of investment that any Indian company gets from countries sharing land borders with India.

This is sort of a bitter-sweet experience for Tencent. Although they have investments in quite a few companies in India, the government of India has banned games published by the Tencent Group such as PUBG Mobile and PUBG Lite in the past. 

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