In a recent meeting, Flipkart’s top leaders asked CEO Kalyan Krishnamurthy to reduce the company’s monthly costs from $40 million (₹340 crore) to about $20 million (₹170 crore). This is part of Flipkart’s plan to prepare for a possible IPO (when a company sells its shares to the public) in India and shift its legal base from Singapore to India.

Cash burn is how much money a company spends on operations each month. Flipkart’s board wants to reduce its annual costs to $250 million, although the company also plans to expand its fast-delivery service, Flipkart Minutes. The service will open 500 new small storage centers (called dark stores) over the next eight months. This puts Flipkart in competition with companies like Blinkit, Zepto, Swiggy Instamart and Tata BigBasket.

Flipkart now has a tough decision to make - spend less while growing in a highly competitive market. The company has already shut down Flipkart Health+ (its online pharmacy) and cut other small businesses.

Flipkart's rival Zepto also has higher costs - more than ₹250 crore ($30 million) per month. Flipkart's gross merchandise value (GMV) is more than $29 billion compared to Zepto's $5 billion.

Financially, Flipkart is performing well. In FY24, its online marketplace (Flipkart Internet) generated revenue of ₹17,907 crore, up 21% from the previous year. Losses also narrowed to ₹2,358 crore due to growth in the advertising business.

The board, which includes CEO Krishnamurthy, Lydia Jett, Keki Mistry and other leaders like Walmart’s Dan Bartlett, also confirmed that Flipkart is shifting its legal base to India.

The update comes shortly after Flipkart raised $350 million from Google as part of a $950 million funding round. This is Flipkart’s first major investment since Walmart bought a majority stake in the company in 2018. Flipkart now joins other Indian startups like RazorPay, Pine Labs, Meesho and Septo that are shifting their base to India before going public.