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SoftBank undecided on Flipkart stake sale; True North eyes Shree Digvijay Cement
Photo Credit: Reuters

Japanese conglomerate SoftBank Group Corp. has still not made a decision to sell its more than 20% stake in Flipkart to US retailer Walmart, as it weighs tax liability arising from the sale as well as reviews significant potential in the Indian e-commerce giant, said reports.

SoftBank will take a call on exit in the next 10 days, said The Economic Times report citing a person in the know.

The conglomerate may hold the Flipkart stake for 6-12 months to avoid short-term taxation issue, the report said. SoftBank had pumped in $2.5 billion into Flipkart in August last year.

Further, it sees a significant upside potential in Flipkart, which has been valued at about $22 billion in the transaction announced on Wednesday, according to two people. SoftBank CEO Masayoshi Son said on Tuesday his firm’s investment in the Indian online retailer had now grown to $4 billion.

On Wednesday, Walmart had agreed to purchase a stake of around 77% in India’s largest e-tailer for $16 billion (Rs 1.07 trillion).

Separately, homegrown private equity firm True North is looking to acquire a 75% stake in Shree Digvijay Cement Company Ltd from promoter Votorantim Cimentos SA, Brazilian cement producer, The Economic Times reported, citing two people in the know.

Votorantim wants to exit Shree Digvijay Cement as part of its broader strategy of prioritising assets and reducing debt, according to the report.

The market capitalisation of Shree Digvijay Cement is around Rs 410 crore.

In another development, global private equity firms Blackstone Group and Warburg Pincus are in separate talks to invest in Max Financial Services Ltd for a minority stake, Mint reported.

Citing a person aware of the development, Mint said both have expressed interest in the investment subject to Max Financial Services’ unit making an acquisition.

In April, Max Financial Services said its board had approved a plan to raise funds from KKR Capital Markets India, TPG Global LLC and Standard Chartered Bank to help its unit Max Life Insurance Company pursue an acquisition opportunity.

The company didn’t specify the amount it would mobilise and whether it would raise equity funding or debt capital.

Earlier this month, The Economic Times had reported that Max Life Insurance Company and Exide Life Insurance Company had been shortlisted as potential buyers for a significant stake in IDBI Federal Life Insurance Company.

Their separate bids value the company at more than Rs 6,000 crore.

Separately, Ahmedabad-based bearing cages maker Harsha Engineers Ltd is looking to raise Rs 450-500 crore through an initial public offering, seeking a valuation of Rs 2,500 crore, Mint reported, citing three people aware of the development.

The company has asked Axis Capital and Edelweiss to manage the share sale, according to the report.

Founded in 1972, the company manufactures brass, steel and polyamide ball bearing cages. It also manufactures stamped components, according to its website.

The company’s consolidated net sales stood at Rs 624 crore for the year through March 2017, down from Rs 632.8 crore a year ago.

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