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Tencent buys stake worth $264 million in Indian e-commerce platform Flipkart

June 14, 2022 8:57 am

According to Indian media Mint, Tencent, through its European subsidiary, bought a $264 million stake in Flipkart from its co-founder Binny Bansal.

Bansal holds about 1.84% of Flipkart after selling part of the stake to Tencent Cloud Europe BV.

The transaction was completed on October 26, 2021 and was shared with the government authorities at the beginning of the current financial year.

After the deal, the subsidiary of Tencent owns 0.72 percent of Flipkart, which is worth about $264 million based on the e-commerce company's last valuation.

The company's valuation soared to $37.6 billion in July 2021 after raising $3.6 billion (approximately Rs 268.056 crore) in a funding round led by Singapore's sovereign wealth fund GIC, CPP Investments, SoftBank Vision Fund 2 and Walmart.

Despite having its headquarters in Singapore, Flipkart currently solely conducts its e-commerce company in India, which has limits on Chinese investment. 

Citing sources, Mint said the transaction took place in Singapore but Flipkart informed Indian authorities about it as a responsible entity and 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 a land border with India.

Following a border clash with China in 2020, the Indian government imposed restrictions on investment from China and banned hundreds of Chinese apps from operating in the country, including ByteDance-owned short-video platform TikTok, Tencent's mobile games PUBG and Alibaba's cross-border e-commerce AliExpress.