- Walmart Inc WMT and other PhonePe shareholders are liable to $1 billion in tax after the digital payments company shifted its headquarters to Bangalore, India.
- The bill stems from the relocation and growth in the value of PhonePe Pvt, which Walmart took majority ownership of after acquiring parent outfit Flipkart Online Services Pvt, Bloomberg reported.
- Now separated from Flipkart and re-domiciled from Singapore to India, the fintech firm raised funds at a $12 billion pre-money valuation from General Atlantic, Qatar Investment Authority, and others, triggering the tax.
- Also Read: India Eyes Interoperable Network To Thwart Oligopolistic Tendencies Of Influential E-commerce Platforms
- Investors, including Tiger Global Management, procured shares of PhonePe in India at the new price, leading to tax implications of roughly ₹80 billion for existing shareholders.
- For years, technology companies with the bulk of their operations and business in India chose to incorporate in Singapore due to its friendlier tax regime, ease of obtaining foreign investments, and public debuts on foreign exchanges, Bloomberg writes.
- PhonePe’s shift could be a predecessor to the digital payments company preparing for a stock market listing in India.
- Payments firm listed overseas struggled to get a green light from India’s financial and banking regulator, the Reserve Bank of India.
- The government currently bans India-headquartered companies from directly listing on overseas exchanges.
- Walmart held $11.6 billion in cash and equivalents as of October 31, 2022.
- Price Action: WMT shares traded higher by 0.14% at $143.80 in the premarket on the last check Wednesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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