A report published by The Times of India suggested that decision on the deal propelled by common investors is expected to be taken in two weeks.
"This potential consolidation play at work would progress only if Flipkart and the two common investors address concerns of the Myntra promoters and the smaller investors. Tiger and Accel together own 53% shares, while IDG Ventures and Kalaari have a combined stake of 28%. Bansal owns 9% leaving the rest with other cofounders and staff. In Flipkart, the two common investors (Tiger & Accel) together hold around 40%," The Times of India report said.
As per the offer, Flipkart wants to keep Myntra as a separate unit.
Flipkart is an online shopping website popular for products like books, electronics, stationery supplies, and lifestyle. By merging with Myntra, online retailer of fashion and casual lifestyle products, Flipkart can expand its online shopping experience to customers.
Flipkart aims to achieve $1 billion sales by next year. It raised $360 million last year from investors including Morgan Stanley Investment Management, Dragoneer Investment Group, Belgium-based investment firm Sofina, and Vulcan Capital.
Myntra, one of India’s biggest online clothing retailers has been in talks with various investors to raise around $50 million, including Azim Premji’s PremjiInvest.
As competition heats up in India’s growing online market, if Flipkart and Myntra agree to merge, Jabong, Amazon and Snapdeal will be seen battling for market share.
When compared to China’s $200 billion market for online sales, India’s $3.1 billion e-commerce market is anticipated to grow by seven times to $22 billion in five years, according to Hong Kong based investment bank CLSA forecasts.
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