In 11 months, Flipkart has lost a third of its valuation

  • HT Correspondent
  • Updated: May 28, 2016 06:31 IST

BENGALURU: Flipkart, India’s largest e-commerce company, embroiled in a campus recruitment faceoff with IIM Ahmedabad, has got another devaluation jolt: Morgan Stanley has marked down the value of its holdings by 15.5%, the second in less than three months.

The US-based mutual fund managed by Morgan Stanley slashed the value of its holding in Flipkart by 15.5%, according to filings with market regulator Securities and Exchange Commission (SEC), pushing its overall valuation of India’s largest e-commerce company to $9.39 billion – one-third down from $15.2 billion when it raised $700 million in July, 2015.

Morgan Stanley had in April marked down its Flipkart holdings by 27%.

Morgan Stanley is not alone. T Rowe Price, another MF, reduced the value of its holdings by 15%, Valic Co1 by 29% and Fidelity Rutland Square Trust II by 40%.

Depending on whom you ask, Flipkart is today valued a tad over $9 billion – bad news at a time when the company is scrambling to raise funds.

Reacting to a previous cut in valuation, Flipkart’s new CEO Binny Bansal had told a leading business daily that such devaluations are “mostly a theoretical exercise by small investors.”

Flipkart is said to have been in talks with Alibaba early this year, but the Chinese e-commerce giant did not agree to value it at more than $8 billion, and the deal fell through. Flipkart had termed that report “false and baseless”.

“We are well capitalised for the long term and are not looking to raise funds. We believe in raising funds when they are available and always at the right valuation,” the company spokesperson said in March.

Flipkart is involved in a spat with IIM Ahmedabad for pushing the joining date for 18 new recruits by six months to December, and offering ` 1.5 lakh as compensation for the delay.

The company had attributed the deferment to ongoing organisational restructuring, and said in the new structure, “a centralised hiring process will not work.”

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