Walmart-owned Flipkart's subsidiary has received a license to operate as a non-bank financial company from the Reserve Bank of India. The license has been granted to Flipkart Finance Pvt., a company spokesperson said.
The NBFC license allows the company to lend money but not accept deposits. This marks the first time the central bank has granted a lending license to a large e-commerce player in India.
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Reuters was the first to report on the development.
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In India, e-commerce platforms have usually offered loan products in partnership with banks and NBFCs. An NBFC license will let the Walmart-owned firm to offer credit to customers directly, which in turn is expected to lead to a more streamlined model than a partnership one.
Flipkart too is currently tied up with the likes of IDFC Bank and Axis Bank for offering personal loans. It also has its own financial services application called super.money. Launched in August 2024, super.money is already India's sixth largest Unified Payments Interface app.
Now put things into perspective, IPO-bound PhonePe, India's largest UPI player, is also owned by Walmart. Since it acts as a distributor of mutual funds and insurance products, a lending business from Flipkart's end will give the US retailer a wider presence in India's financing sector.
Last year, Zomato withdrew its application for an NBFC license, as well as its license for acting as an online payments aggregator, saying that it doesn't wish to pursue the lending business anymore.
US retail giant Walmart had earlier said that Flipkart's IPO remains its "long-term ambition" after it bought out Tiger Global's stake. Walmart Inc. paid $1.4 billion to buy Tiger Global Management's remaining stake in Flipkart. The IPO remains "our long-term ambition, and it will come at the right time", a spokesperson had told NDTV Profit earlier.
It had also appointed former SoftBank managing partner Lydia Jett to its board as it strengthens governance and prepares for an initial public offering.
It has now joined the likes of Pine Labs, Zepto and Razorpay that have 'reverse flipped' to India, a process where an Indian company shifts its legal domicile and headquarters back to India after having initially moved them overseas, often for taxation or regulatory benefits.
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