Walmart, the world’s largest retailer, has agreed to buy SoftBank’s one-fourth stake in Flipkart for between $4 billion and $4.5 billion — making for an eye-popping return of at least 60% on the $2.5 billion investment that the Japanese internet conglomerate made in the Indian ecommerce leader just last August.

This was confirmed by two sources who asked they remain anonymous in this story because the deal has not closed yet. The deal talks are at a final stage and expected to close in two weeks.

The valuation of Flipkart in the deal may be lower than the $20 billion that has been reported widely.

“SoftBank has decided to sell its entire stake in Flipkart,” said one of the sources, who is a senior executive with one of the merging companies. “The deal was being held up at SoftBank’s end. It wants the best out of the Walmart-Flipkart deal.” The price has been more or less agreed upon with other parts of the deal being sewn up, this source added.

SoftBank declined comment; a spokesperson said in an email: “We never comment on speculations.” Walmart said it had no comments for this story. Flipkart had not responded to FactorDaily’s questions at the time of publishing this story.

Walmart’s ambitions of acquiring the Indian ecommerce leader and get a toehold in India, the world’s single, last large retail market with a low penetration of online buyers were stuck with SoftBank’s reluctance to exit Flipkart. Other investors such as Tiger Global, Naspers, Tencent, Accel, among others had agreed to sell to Walmart.

After last year’s $2.5 billion fund infusion, SoftBank held close to 24% in Flipkart. “Such a large fund infusion happens when an investor has strategic plans to help in building the company… SoftBank is one company that likes calling the shots. With Walmart holding a majority stake, that will not happen,” said a second source, who knows the issues in the discussions.

Though publicly unstated, the understanding at the time of SoftBank’s investment in Flipkart was that there would eventually be a four-way merger between Flipkart, its smaller rival Snapdeal, Paytm Mall, and the Paytm’s Chinese backer Alibaba’s operations in India. This would create a deep-pocketed competitor to US ecommerce giant Amazon’s India operations. SoftBank tried to sell Snapdeal to Flipkart, but the deal fell through.

SoftBank holds an estimated 28% in Alibaba Global and its founder-CEO Masayoshi Son is close to Jack Ma, Alibaba’s founder and chairman.

“SoftBank made two large investments – one in Paytm and the other one in Flipkart. The idea was to take Alibaba’s help to merge Paytm Mall and Flipkart to build a large ecommerce business with a strong backing of digital payments,” said a third source who is a senior executive at a SoftBank-backed company.

When SoftBank invested in Flipkart and Paytm Mall in 2017, the Indian ecommerce industry was at $20 billion revenues. It is expected to top $52 billion by 2022, by projections of German market intelligence company Statista.

According to market watchers, SoftBank’s exit is largely because its initial plan failed. “It is important to recalibrate strategies when the ground reality changes. Softbank’s investments were strategic. (Now) there is no strategic reason to stay in Flipkart. So it is best to cash out when the deal is good,” said Arvind Singhal, chairman of advisory firm, Tehcnopak.

The battle in Indian online retail is becoming more like in the US, where Walmart is battling Amazon. Walmart made some wrong decisions in China after buying into mid-sized ecommerce company Yihaodian. The business did not scale much and Walmart sold its China business in mid-2016 to JD.com, the second largest e-tailer in China and a rival to Alibaba.

With its decision, SoftBank seems to have made the best of a tough situation. “It would have tough clauses in its deal with Flipkart. This (the price it is receiving) not only makes the acquisition more expensive but also gives it (SoftBank) money to back Paytm,” said a fourth source with knowledge of the talks. “Don’t forget Paytm is in the India ecommerce race and will need loads of cash to back it.”

SoftBank in April invested $400 million in Paytm Mall and holds a little more than one-fifth of it; Alibaba owns more than 30% in the Indian company’s ecommerce unit. Paytm’s biggest business is in digital payments.

Visuals: Rajesh Subramanian)