SoftBank offers to buy Flipkart shares at lower valuation

SoftBank has offered to buy additional shares in Flipkart but at a reduced valuation in the range of $9 billion to $10 billion, Livemint reported on Thursday.

Citing sources, the report said the Japanese conglomerate offered to buy Flipkart shares from investors and former and existing employees for $85 to $89 per share which makes it lower than the pre-money valuation at which Flipkart raised money recently.

Flipkart’s share sale to SoftBank is likely to be completed in December, and it would lower Tiger Global’s stake in the e-commerce firm to about 20 percent. Tiger Global alone could sell shares worth $700 million to SoftBank. Existing and former Flipkart employees are also expected to sell some of their shares with SoftBank putting certain caps on the quantity each employee can sell.

SoftBank's latest infusion in Flipkart has changed the metrics of its rivalry with Amazon that boasts of a huge war-chest. As per the latest RedSeer E-tailing Leadership Index (ELI) report, both the e-tailers are going neck-to-neck with the tied score of 92 for the July-September period. Also, the rivalry between the two is getting intense by the day given that both are extremely well-funded and are investing heavily in their respective businesses. While Flipkart got a major boost this year with two massive rounds of funding, Amazon too continues to up its game with investments coming in regularly.