Flipkart valuation slashed by Morgan Stanley for 4th time in 9 months

The timing of the latest valuation markdown by Morgan Stanley is less than ideal for Flipkart, which has initiated talks for another fresh round of funding


Flipkart’s current valuation after the latest markdown stands at $5.54 billion. Photo: Mint
Flipkart’s current valuation after the latest markdown stands at $5.54 billion. Photo: Mint

Bengaluru: At a time when India’s most valuable internet firm Flipkart is looking to raise a fresh round of funding, it has faced another valuation markdown by one of its mutual fund investors.

On Tuesday morning, a mutual fund managed by Morgan Stanley drastically marked down the value of its holdings in Flipkart by about 38% to $52.13 a share, down from $84.29 a share in the June quarter. The mutual fund currently holds 1,969 shares in Flipkart that are collectively valued at $102,644.

Flipkart’s current valuation after the latest markdown stands at $5.54 billion. This marks at least the fourth valuation markdown from Morgan Stanley in the course of the last nine months.

The fund marked down the value of its Flipkart shares to $87.9 per share as of 31 March from $103.97 per share as of 31 December. The December value marked a 27% fall from $142.24 per share in June 2015, according to a regulatory filing by the firm in February.

Earlier in November, two other investors, Valic and Fidelity, who earlier marked up the value of their shares in the company, marked down their shares in Flipkart—by 11.3%, and 3.2%, respectively—for the quarter ended August.

The timing of the latest markdown is less than ideal for Flipkart, which has initiated talks for another fresh round of funding. Mint had reported on 9 October that Flipkart plans to hit the market to raise a new, large round of funds in the range of $500 million to $1 billion before the end of the year.

Mint also reported on 25 November that Flipkart is now considering appointing an investment bank for the first time in years to try and attract new investors to its next round of funding

T Rowe Price had lowered the value of the stock it holds in about 12 start-ups that are valued at more than $1 billion (commonly known as unicorns), including ride-hailing firm Uber Inc. (where it cut the value of its stake by 6%), note-taking firm Evernote Inc. (down by 21%) and rental platform Airbnb Inc. (by 6%).

Another mutual fund investor that marked down its stake in Flipkart is managed by US-based investment group Vanguard, which invested in Flipkart in the Series G and H rounds it raised in 2014.

Vanguard marked down the value of Flipkart shares by 25%, from $136.87 as on 30 September 2015 to $106.65 as on 31 March 2016, according to regulatory filings with the US Securities and Exchange Commission (SEC). Vanguard valued Flipkart at $11 billion with this.

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