Flipkart-owned fashion e-tailer Myntra business-to-business (B2B) retail arm, Myntra Jabong India Pvt. Ltd, has got a working capital credit of Rs 50 crore ($7.7 million) from Kotak Mahindra Bank, said a VCCircle report.
This will allow the lender to have exclusive charge of the company’s raw material stocks, semi-finished and finished goods, consumable stores and receivables.
Earlier, Myntra had taken a loan of Rs 199 crore ($31.1 million ) from Yes Bank. This is not the first time that a corporate house has resorted to loan for meeting the operational need. Last year in June, Flipkart was in advanced talks to raise $ 300 million (Rs 2,000 crore then) in loans from Indian banks.
In September this year, Flipkart India secured a working capital credit of Rs 1,000 crore ($156.2 million) from Axis Bank in addition to existing Rs 375 crore facility it already had with the bank.
Myntra Jabong India, earlier known as Quickroutes Internet Pvt. Ltd, was established in March 2017 as the B2B retailer to e-commerce marketplaces Myntra and Jabong.
According to Industry experts, the company’s private label push was an effort to take advantage of 100% foreign direct investment (FDI) in B2B e-commerce, the company is yet to reveal its strategy.
The firm wants to create an independent seller entity that can store Myntra’s private labels as well as other brand s’ merchandise, and supply them to its associated marketplace entities, something similar to a WS Retail (for Flipkart) and Cloudtail (for Amazon).
Besides, Myntra is planning to launch its own loyalty programme to keep existing customers on its platform.
Soon to be launched loyalty programme will be Fashion-specific and different from existing such programmes in the market. “We have to work on the innovative programme, which won’t be like Amazon’s Prime. It will come out in a month and a half,” said Ananth Narayanan, Myntra’s CEO.
The company aims to touch, profitability in next fiscal, annual revenue of about Rs 8,500 crore for 2017-18.