Walmart’s Flipkart To Raise $1 Billion As It Eyes Going Public In US

India’s Flipkart is out to raise at least $1 billion as it looks at launching an initial public offering (IPO) of stock in the U.S. Sources told the Economic Times of India that the round of funding for Flipkart, which is majority owned by Walmart, could rise as high as $2 billion.

The funding round would go to expansion and to boost Flipkart’s valuation ahead of an IPO, the Times said. The eCommerce and grocery delivery company faces such rivals as Amazon and India’s Reliance Retail.

Though the fundraising is largely targeting new investors, existing Flipkart funders like GIC of Singapore and Qatar Investment Authority have been approached as well, according to the report.

The plans for an IPO in the U.S. “are ongoing with SPAC as a backup option,” an executive involved in the process said, on condition of anonymity. A special acquisition company typically raises money through an IPO. The SPAC investment firm then has cash to buy out a company with existing operations.

The source said the fundraising round is “is not being positioned as pre-IPO but for expansion. The management believes there is a lot of value” as yet to be unlocked.

The Times reported that some analysts expressed surprise that Walmart is not infusing fresh capital in Flipkart and instead largely seeking external funding. On the other hand, others said that raising capital now from external investors at this juncture might help with getting higher valuation.

Flipkart is likely to be valued at $28 billion to $30 billion in this round.

Last month, Bloomberg reported that Flipkart was working on going public with a valuation set at $35 billion. The IPO discussions are ongoing and subject to change. In addition, Flipkart might end up choosing a location outside the U.S.

In March, Flipkart said it planned to expand grocery delivery to 70 cities over the next six months. At the time, grocery delivery was already available in 50 Indian cities.

A press release called grocery “the next big frontier for online shopping,” and a “key focus area” for Flipkart.