In what could be a major setback to Flipkart’s future growth plans, a mutual fund managed by one of the largest investment banker Morgan Stanley has once again de-rated Flipkart’s valuation.
This is the fourth cut in valuation for Flipkart – India’s largest online shopping destination, by the Morgan Stanley mutual fund.
Following the latest downgrade, Flipkart’s valuation now stands revised at $ 5.5 billion. Some 17-months back, the online retailers’ valuation was pegged at around $ 15.2 billion – so the current valuation is a massive drop of over 63 per cent.
According to a regulatory filings by Morgan Stanley, Flipkart shares were valued around $ 103.97 in December 2015. They were then revised lower to $ 87.9 a piece in March 2016, followed by $ 84.29 in June 2016. The current revision is the sharpest dip in terms of per centage, as it shelves 38 per cent value to $ 52.13 per share of Flipkart.
Even as the online business is on an upward trajectory for India, competition from other online retailers like – Snapdeal, Amazon etc could be one of the reasons for recent downgrades.
According to VCCircle report, the latest markdowns comes at a time when Flipkart is looking to raise fresh investments, and the same could be affected.
Interestingly, following the latest downgrade, Flipkart’s valuation have now dipped to July 2014 levels, when the company first crossed the $ 5 billion mark.