Walmart on lookout for external investors for PhonePe: Sources

Walmart is preparing to hive off digital payments firm PhonePe from Flipkart Group as an independent entity and is looking to attract external investors into PhonePe, two sources privy to the talks said.

“The discussions have already happened between PhonePe and the Flipkart board. Sameer (Sameer Nigam, the chief executive at PhonePe) has spoken to Walmart about the spin off. They are figuring out the structure they will adopt for the business, whether to have the company listed in Singapore and how the cap-table will be aligned,” said one of the persons privy to the talks.

Walmart wants to focus on consolidating the e-commerce operations and narrow losses, sources said. The US-listed company is under pressure to show progress on its bet on Flipkart, especially after the new e-commerce rules in India, said to be restrictive to foreign-owned firms, cast a cloud of uncertainty over anticipated long-term gains from the deal. Walmart acquired 77% stake in Flipkart for $16 billion in May last year.