Flipkart-Walmart deal: Near-term pressures to rise for listed retail firms

While growth prospects are bright, any pricing war brought on by the online players will force other retailers to match the same

The $16-billion (Rs 1.08 trillion) acquisition of Flipkart by Walmart could lead to heightened competition for India's listed retail companies. While analysts believe the growth opportunities are large for the overall space, the near term could see some pressure on the listed ones. This is because of the $2-billion equity infusion by Walmart and its stated intention of focusing on growth over profit.

Harit Kapoor and Mehul Desai of IDFC Securities expect the intensity of discounting in the near to medium term to remain elevated. For, both the majors (Amazon and Walmart-Flipkart) will focus on driving growth, ramping up scale