Online retailer Flipkart had invested ₹414.60 crore in its fashion arm Myntra. The funding came from Singapore-based FK Myntra Holdings Private Limited, according to the Registrar of Companies (RoC) documents, sourced from business intelligence platform Paper.vc. FK Myntra Holdings Private Limited operates as a subsidiary of Flipkart Online Services Pvt. Ltd. Myntra Designs got the capital infusion under the “Rights Issue” in January this year, for which it issued 66,44,281 equity shares.
A rights offering (issue) is an issue of rights to a company’s existing shareholders that entitles them to buy additional shares directly from the company in proportion to their existing holdings, within a fixed time period, according to Investopedia.
Flipkart had acquired Myntra in 2014 in a deal estimated to be worth $370 million to compete against online retail giant Amazon which entered the Indian market in 2013. In 2016, Myntra bought smaller rival Jabong for $70 million with an aim to create India’s biggest online fashion retailing business. Myntra has now partnered with over 2000 leading fashion and lifestyle brands in the country including Nike, Puma, CAT and Harley Davidson. It now services over 19,000 pin codes across the country.
India’s e-commerce sales are expected to grow at a 30% compound annual growth rate through FY 2027 and touch $200 billion of gross merchandise value, according to global financial services firm Morgan Stanley.