India’s largest e-commerce company Flipkart has taken yet another devaluation blow, the fifth in a series of similar investor write-downs and second by investor Morgan Stanley over the past two months.
US listed mutual investment Morgan Stanley, according to filings with market regulator Securities and Exchange Commission (SEC), has slashed the value of its holding in Flipkart by 15.5%, pushing its overall valuation of the e-commerce giant to below $10 billion. According to Morgan Stanley the enterprise value of Flipkart now stands at $9.39 billion, against around $15 billion a year ago.
Flipkart has not offered any comments on this latest round of devaluation.
In an earlier interview to financial daily The Economic Times, Flipkart’s new CEO Binny Bansal had dismissed such devaluation of the company’s stock as “mostly a theoretical exercise by small investors.”
Last month Morgan Stanley and another investor T Rowe Price wrote down Flipkart valuation by a 27 and 15% respectively which was followed by two more such mark downs by Valic Co 1 and Fidelity Rutland Square Trust II who wrote down their respective holdings in the company by 29 and 40%, respectively.
Flipkart is an unlisted company and all such mark downs are down by institutional investors who are mandated to show what they believe as a realistic value of the stocks they hold in such investments that are not traded.
{{/usCountry}}Flipkart is an unlisted company and all such mark downs are down by institutional investors who are mandated to show what they believe as a realistic value of the stocks they hold in such investments that are not traded.
{{/usCountry}}Since January this year after taking over as CEO of one of India’s most talked about Unicorns (a word loosely used describe start ups valued for more than $1 billion), Binny Bansal has reportedly been on a mission to cut costs and push the company, he co-founded nearly a decade ago, to profitability.
Earlier this week, Flipkart had also received a rap on its knuckles from India’s premium business school, Indian Institute of Management, Ahmedabad for pushing the joining date of 18 new recruits by six months and offering Rs 1.5 lakh as compensation for the waiting time as joining bonus. On Wednesday, a Flipkart spokesperson had defended the company’s decision of deferring joining dates of new employees due to the organizational restructuring of the company. “Under the new organizational structure a centralized hiring process will not work,” a company spokesperson had said.