From $15 billion valuation to $5.5 billion; Flipkart faces hard times

Talking on downturn in valuation Siddharth Shahani, Executive Director, Indian School of Design & Innovation had told Zee Business, "Passion has taken the company so far, now experience is needed to take it to the next level. I think it is a natural transition that you see anywhere in the world. The first three years is passion driven, the next three years is system oriented driven.”

Flipkart has been trying to raise fresh money from new investors existing ones are busy slashing valuation of their holding in the company. Photo: Reuters

On one hand India's most valuable e-commerce firm Flipkart has been trying to raise fresh money from new investors existing ones are busy slashing valuation of their holding in the company.

On January 25,2017, Fidelity Investment, for the second time, slashed value of its shareholding in Flipkart.

The US-based mutual fund company has trimmed value of its stockholding in Flipkart by 36.1%, reducing Flipkart's total valuation to $5.56 billion.

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On January 20, 2017, T Rowe cut its stockholding valuation in Flipkart's valuation by 4%.

This has been the case for a year now.

Morgan Stanley, in November 2016, lowered the value of its shareholding in Flipkart by 38%. Stanley valued its holding in Flipkart at $52.13 per share for the three months that ended September, down from $84.29 a share in the previous quarter.

Fidelity along with Valic also marked down their shares in Flipkart in November 2016—by 11.3%, and 3.2%, respectively.

While in December 2016, Vanguard Variable Insurance Funds made its second revision in Flipkart. The company which invested in Flipkart in the series G and H rounds, marked down the value of Flipkart shares by 33%, from $102.6 in March 2016 to $68.7 per share as on 30 September 2016.

With this, Flipkart’s valuation went down to about $7.3 billion from the $11 billion which was valued at by Vanguard in March 2016.

Earlier in July 2016, 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).

Flipkart last raised money in May 2015, where its valuation stood at $ 15 billion.

Talking on downturn in valuation Siddharth Shahani, Executive Director, Indian School of Design & Innovation had told Zee Business, "Passion has taken the company so far, now experience is needed to take it to the next level. I think it is a natural transition that you see anywhere in the world. The first three years is passion driven, the next three years is system oriented driven.”

Recently, Flipkart named Kalyan Krishnamurthy as the new chief executive office and moves cofounder Binny Bansal to a new position as group CEO.

Flipkart also 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

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