A Detailed Risk Analysis Of Flipkart Company Before Investing In Its Shares

Many giant IPO and pre-IPO companies offer significant investment opportunities to retail investors to invest in listed and unlisted shares, and Flipkart is one of them. Like any other company, Flipkart also opens up doors for investors to earn high ROI in the long term. According to The Hindu Business Line, two years back, Flipkart raised a flabbergasting 3.6 billion through its pre-IPO round, which was the biggest amount ever raised by any e-commerce company. 

Flipkart performance in the pre-IPO segment makes it the giant platform in the e-commerce sector. Therefore, investing in Flipkart pre-IPO stocks can be rewarding when choices are made in the long run. However, it is equally important to know the risk factors associated with investing in Flipkart unlisted shares. In this write-up, we will confabulate with a risk analysis of the Flipkart company before investing in its shares.

An Overview Of Flipkart: India’s Biggest e-Commerce Marketplace 

Launched in 2007 in Bangalore by Sachin Bansal and Binny Bansal, Flipkart is the biggest e-Commerce in India’s booming marketplace. The journey of the company began by selling books on its platform. Today, the company deals in B2B distribution of gadgets, smartphones, tablets, laptops, mobile accessories, clothing, footwear, lifestyle products, grocery, etc. Since 2010, the company has procured a variety of businesses like eBay India, Myntra, Letsbuy, Jabong, etc. 

In addition, the company has around eight crore products across 80+ categories, along with ten crores plus registered users and innovative technology. All this helps in delivering 80 lakh orders every month and one crore page visit daily. In 2018, the company was acquired by Walmart, an American multinational retail corporation, for a massive amount of  1 lakh crore for a 77% stake, making it the biggest deal in Indian history. That deal valued Flipkart at around $20 Billion.  

Potential Risks Associated With Investing In Flipkart

Like any other company, investing in Flipkart unlisted shares carries certain risks. Some of the potential risks associated with Flipkart pre-IPO stocks include the following: 

Market Condition

The e-Commerce market in India is still new and dynamic. The changes keep occurring as per the regulation and consumer preferences. Economic downturns or changes in government policies might negatively impact the company’s performance to some extent. 

Competition

The competition in the e-Commerce industry is relatively high, and the most significant competitors of Flipkart are Amazon, Myntra, and Alibaba. It indicates that Flipkart operates in a highly competitive market. This leading competition in India’s booming e-Commerce marketplace could impact the company’s growth and profitability prospectus. 

Logistics and Delivery Challenges

Another potential risk that can affect your investment in Flipkart unlisted shares is logistics and delivery challenges, which ultimately lead to delays and increased costs. The increased costs will significantly affect the company’s profit. 

Dependence on Third Parties

Flipkart relies on third-party sellers to make a significant portion of its sales. If these sellers were to face difficulties (data security, return, refund, etc.) in any sense, it would negatively impact the company’s revenue growth. 

Cybersecurity 

As an e-Commerce marketplace, Flipkart is vulnerable to cyber and phishing attacks. This leads to the loss of consumers’ valuable data and reputation damage to the company. Eventually, this impacts the company’s financial performance, and people who have already invested in Flipkart pre-IPO shares might face loss. 

Retail investors must conduct thorough research and consider these risks before investing in Flipkart unlisted shares. Also, it is recommended to consult a financial advisor or broker or take help from the best broker platform in India to make your investment worthwhile. 

An Analysis Of Flipkart IPO

According to Business Today, in December 2020, Walmart planned to launch a Flipkart IPO of $10 billion. With this, the company’s total valuation will come to $40 billion. According to some experts, such an IPO would allow Walmart to double the returns compared to its initial investment of $16 billion in 2021. However, Walmart’s owned Flipkart has already raised its IPO valuation target by around $60-$70 billion and plans to list in the US this year. The primary reason Flipkart is delaying its IPO is due to the company’s internal strategy to boost valuation further by focusing on its relatively new businesses like healthcare and travel booking services. 

In 2021, Flipkart acquired the Indian travel booking website Cleartrip and also launched a “Health+” app to provide people with medicines and other healthcare products and services with ease. The same year, the company managed to raise around $3.6 billion via a round of funding that helped the company improve its financial position in the Indian eCommerce marketplace. 

Invest In Flipkart Unlisted Shares Before Its IPO

Flipkart may soon launch its IPO this year, and with its IPO launch, the company may benefit a lot of investors who invest in its pre-IPO shares. Moreover, investing in Flipkart unlisted shares is also a great way to diversify your investment portfolio because pre-IPO stocks are less risky and provide better returns. So, if you’re planning to buy Flipkart unlisted shares, Stockify, India’s leading online trading platform, is your ideal option. Here you can invest in top pre-IPO companies like Tata Technologies, Chennai Super Kings, OYO, and many more. 

You can connect with experts at Stockify, who will give you complete detail about any company you want to invest in. Moreover, you can also check updated share prices, financial performance, revenue growth, EBITDA, EPS growth, and other key performance indicators of the company. Why wait? Connect with us and start trading now. We will make your buying and selling of unlisted shares a great experience.

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Walmart’s Indian retail platform Flipkart has increased its internal valuation IPO valuation to $60-$70 billion in 2023. Before investing in Flipkart shares, check its risk analysis.

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