Flipkart has sold a tiny stake to ‘ Times of India’ publisher Bennett, Co. for money and advertising area latter’s media properties
India’s largest e-commerce business Flipkart Internet Pvt. Ltd has sold a tiny stake to media firm Bennett, Coleman and Co. Ltd (BCCL)
India’s largest e-commerce business Flipkart Internet Pvt. Ltd has sold a tiny stake to media firm Bennett, Coleman and Co. Ltd (BCCL) for cash and advertising space in the latter’s media properties, according to regulatory files and one individual familiar with the issue.
BCCL made a private placement offer of about Rs260 crore to obtain a warrant for Class B equity shares in Flipkart, according to documents filed together with the Registrar of Companies a company research platform, and Tofler.
BCCL invested Rs26 crore in December in Flipkart; the remaining sum will likely be paid when it converts the warrant.
Flipkart has been beaten by valuation markdowns from five of its investors in the last year even as it's in the marketplace to raise capital that were fresh.
In June this past year, Mint reported that Flipkart was in talks to sell an undisclosed position in a deal that would be funded partially by cash and partially by advertisements to BCCL.
Chief executive of Brand Capital at BCCL, Sivakumar Sundaram, did not respond to e-mails seeking comment.
A Flipkart spokesperson overly declined to comment.
BCCL possesses media properties for example The Economic Times papers and The Times of India and ET Now and Times Now TV channels.
The FlipkartBCCL deal is a so-called private treaty deal. First introduced in 2004 by BCCL to establish a substantial portfolio of holdings, such deals were once controversial, especially because they additionally involved positive media coverage. Since then, nevertheless, such deals have become transparent and common, and have to meet mandated disclosure norms.
At BCCL, the business’s Brand Capital unit handles private treaties. HT Media Ltd, the publisher of Hindustan and Mint Times, has its variation of such deals.
The Flipkart deal farther burnishes BCCL strong connections together with the booming startup company.
BCCL struck the same deal with internet market Snapdeal (Jasper Infotech Pvt. Globally, it also has investments in a high number of startups including Uber Technologies Inc., services supplier Haptik and instruction start-up Coursera.
BCCL also possesses real estate listings site magicbricks.com and music startup Gaana.
Including all its holdings, BCCL owns or has investments in at least a few dozen startups and digital properties, many of which are held Times Internet Ltd., through its web arm While former CEO Satyan Gajwani is now vice chairman of the web arm, Gautam Sinha heads Times Internet as its CEO.
BCCL’s investment in Flipkart comes at a time when India’s e-commerce poster-boy is showing early indications of a sustained turnaround following per year of turmoil that marked a change in jobs of co-founders Sachin Bansal and Binny Bansal. A former executive at Flipkart’s biggest investor Tiger Global Management, Kalyan Krishnamurthy, replaced Binny as CEO.
Flipkart is also attempting to shut a fresh round of funds. Mint reported in October that Flipkart was attempting to raise $500 million-$1 billion in new capital.
By up to 60%, its valuation has been marked down by as many as 5 mutual fund investors of Flipkart since February 2016. Its valuation demands have hurt in the ongoing funding discussions, but Flipkart’s budding recovery is likely to enhance its negotiating power during the talks.