India’s second largest private sector lender, HDFC Bank, has extended a line of credit of over Rs 450 crore to ecommerce player Flipkart, according to latest registrar of companies filings. The development was first reported by the Economic Times.
A Flipkart spokesperson declined to comment on the development. HDFC Bank could not be reached for comment as it is a bank holiday. We will update once we hear from them.
According to the ROC filings, Flipkart signed the deal on February 23, 2016 through its subsidiary Flipkart India Private Limited. Flipkart has provided fixed deposits as security to the bank.
Typically, large and medium firms secure short term loans for working capital to maintain day-to-day operations. The company’s move to get credit from banks comes shortly after Morgan Stanley (one of its investors) marked down its investment in the company by 27% reducing Flipkart’s valuation to little over $11 billion from $15.2 billion.
Flipkart has so far raised $3.12 billion from 12 rounds of funding from 16 investors including Tiger Global, DST Global, Accel Partners and Singapore GIC and T Rowe Price. In September 2015, the company confirmed that it raised $700 million. Tiger Global and existing investors including Steadview Capital participated in the fundraise. Flipkart co-founders Sachin Bansal’s and Binny Bansal’s holdings of about 8.5% each in India’s most valuable online marketplace are now worth more than $1 billion.
Changes at top
In February, head of commerce division and Myntra chairman Mukesh Bansal quit the company. Chief business officer Ankit Nagori too put his papers down. Earlier in January, Flipkart named named Binny Bansal as the new chief executive officer while Sachin Bansal took on the role of executive chairman. The Bansals are not related.