In what is another major executive shuffle at the highest levels of the hierarchy, erstwhile Tiger Global executive Kalyan Krishnamurthy has been anointed as Flipkart’s new CEO. Binny Bansal meanwhile, has moved up to occupy the newly created position of group CEO.
This move reminds one of Flipkart’s last major reshuffle which took place around one year ago. The restructuring back then saw Sachin Bansal become the executive chairman of the group, while Binny Bansal (who was the Chief Operating Officer) moved up a rung to occupy the top rung on the ladder.
Krishnamurthy was working with Flipkart as its head of commerce unit and joined the company from its largest investor, Tiger Global.
Announcing the reshuffle, India’s largest e-commerce retailer said,
This newly formed group organisation will focus on creating future value through a portfolio of new, high growth businesses, manage capital allocation across group companies, and ensure each business has a strong CEO in place.
According to FactorDaily, which claims to have seen an e-mail sent by Binny Bansal,
We have set ambitious growth and profitability targets, and to achieve these, we believe that demand, supply and engineering capabilities across the business need to be integrated. To drive this integration, we are creating the role of Flipkart CEO.
It also claims that the newly created Group CEO will focus on “leading new, high growth businesses, capital allocation and IPO readiness”.
Meanwhile, the new Flipkart CEO Krishnamurthy, Myntra-Jabong CEO Ananth Narayanan and PhonePe CEO Sameer Nigam will all report to Binny Bansal as the group CEO. The groups CEO will have wider responsibilities that will include allocating capital to the various companies in the group (all of which need cash to burn at the moment). He will also be an important part of the CEO selection process.
Along with Group CEO, a group CFO position may also be created to join Bansal. From what I have been able to take away, the Group executives will leave the day-to-day running of the companies to their own execs, while major decisions that impact the group as a whole will be taken by them. Meanwhile, Head of people Nitin Seth will be taking over Binny’s old job as the Chief Operating Officer while Ekart CEO Saikiran Krishnamurthy will also move to a new role at the group.
Meanwhile, speculations that this move comes in preparedness of an imminent IPO, have already started doing the rounds of the web. Interestingly, something of the sort happened almost one year ago when Binny Bansal took over the reins as CEO from Sachin Bansal. The market was rife with rumors of an impending Flipkart IPO.
This time though, Flipkart does appear to need the funds more than it did the last year. Markdowns by major shareholders including Morgan Stanley and greater losses which accompanied greater revenue in a market which still sees retailers resort to discounts to lure customers, could well see Flipkart embark upon an IPO. However, whether or not that happens remains to be seen.