After a struggling year, Flipkart seems to have managed to move past its rough times. Following its massive $1.4 billion funding round from tech-giants, the company is now seeing a rise in its valuation from the investors who earlier marked down its shares.
As per the report from BloombergQuint, a mutual fund managed by Morgan Stanley has raised the online retailer’s valuation by nearly a third. Morgan Stanley Institutional Fund has valued its shares in Flipkart at $70.7 apiece as of March, which is a 28 percent jump over December, according to its filing to the U.S. Securities and Exchange Commission (SEC).
The latest rise in the share valuation of the company marks the homegrown e-commerce firm’s valuation at $6.91 billion. While the valuation has been raised, it is still 40 percent lower than $11.6 billion at which it raised $1.4 billion from Tencent Holdings Ltd., eBay Inc. and Microsoft Corp.
Last year, a fund managed by Morgan Stanley had first cut-down Flipkart’s valuation in September 2015. This was after the company raised funding at a whooping valuation of $15.2 billion. Following the first mark-down, other funds managed by Morgan Stanley, Fidelity Investments, Macquarie Group and Vanguard Group followed the suit, cutting the e-commerce major’s valuation multiple times.
However, Flipkart is not the only Indian startup that has seen markdowns in the past. SoftBank Group Corp., which is one of the largest investors in the Indian startup space, reported a valuation loss of 160.4 billion yen (approx. $1.4 billion) on two of its biggest bets in the country — cab aggregator Ola and e-commerce marketplace Snapdeal. Also, Vanguard World Fund had marked down its stake in Ola by 41 percent in February, bringing Ola’s valuation down from $4.3 billion to $2.5 billion.
This increase in the company’s valuation comes at a time when it is in talks with its smaller rival Snapdeal for a merger. The deal is being led by Japan-based SoftBank, the majority shareholder of Snapdeal, which also plans to invest significant amount in the merged entity and buy-out a portion of Tiger Global Management.
The said merged entity will be looking forward to take on Amazon India, which is aggressively expanding its business in the country. Earlier, Amazon founder Jeff Bezos committed to invest $5 billion in the Indian operations, making it clear that the company is here to lead the market.
