Naspers' investment in Indian e-commerce giant Flipkart has paid off, with its stake worth as much as R30.3 billion ($2.4 billion) after Walmart agreed to pay R189 billion ($15 billion) for a controlling stake in the company, Herenya Capital Advisors founder Petri Redelinghuys said.
“That’s a 300% [asset] growth for Naspers which invested just over $600 million in Flipkart since 2012,” Redelinghuys told Business Insider South Africa.
“People thought Naspers had a one trick wonder with Tencent, but with Flipkart, Naspers appears to have a second trick.” In late trading on Friday afternoon, the share was up 3 percent at R2,943.
Flipkart’s board approved an agreement to sell a 75% stake in the company to US retailer Walmart, Bloomberg reported on Friday morning.
The deal will see Flipkart’s existing shareholders Tencent Holdings, JSE-listed Naspers and Microsoft retain small stakes in the e-commerce company, the newswire reported.
The terms of the deal, including Naspers' stake in Flipkart following the transaction, have not yet been disclosed. Naspers did not respond to Business Insider South Africa's request for comment.
Naspers first invested $102 million in Flipkart in 2012, acquiring a 10% stake in the company. In 2013, the company invested $140 million and $293.3 million in 2014. In 2017, Naspers invested another $71 million, growing its stake to 16.5%.
Redelinghuys believes besides Flipkart, major growth opportunity still lie in Naspers’ e-commerce and internet businesses in India and South Africa.
“The problem for Naspers is that these businesses have not yet shown the exponential growth Flipkart has seen,” Redelinghuys said.
* Business Insider South Africa is a part of 24.com, a division of Media24. Media24 is a Naspers company.