E-commerce giant Flipkart may be gearing up to register itself with Nasdaq in the US
Flipkart is believed to be working on an international listing with Nasdaq in the US. According to a Business Standard report, experts believe that before an initial public offering (IPO), expected in 12 to 18 months, the online marketplace must strengthen its financials and organisational structure.
"The choice of stock exchange will be a challenge, as listing in India is fairly impossible because of issues such as profits and the traditional definition of promoter, etc," Harish H V, Partner at Grant Thornton told Business Standard. He added Nasdaq seemed the best choice, considering it was known for listing technology companies and the fact that it was much easier to list there. Flipkart might consider Singapore, too, owing to the ease of listing norms in that country.
For public issues of companies without a three-year 'profitability' record, the Securities and Exchange Board of India (SEBI) had, in 2012, reduced the retail investor quota from 35 % to 10 % of the issue size. The move, aimed at protecting retail investors from IPOs of loss-making companies, limited the participation of small investors in successful IPOs such as those of Just Dial and Snowman Logistics.
Business Standard reports, citing analysts, Flipkart should build a leadership team with global resonance. According to Investopedia, Nasdaq is similar to an "exclusive club", one for which companies with "solid history" and "top-notch management" alone are considered.
Recently, the company announced the appointment of former Google Executive Punit Soni as Chief Product Officer. It has also appointed former McKinsey Director Saikiran Krishnamurthy as Chief Operating Officer (COO) of its commerce platform.
Recent media reports have claimed Flipkart is cutting costs to prepare for an IPO, the company has denied this. A company spokesperson told Business Standard, "Cost optimisation is an ongoing exercise for any company and we are no different. In fact, the company is focused on growth and continues to hire for technology and supply-chain in a big way."