Flipkart valuation cut again, this time by Penn to $9.9 billion

Published: March 10, 2017 3:47 AM

For the quarter ended December 2016, the Pennsylvania based Penn has reduced the value of Flipkart shares by 34.51% on a year-on-year basis.

Flipkart valuation cut again, this time by Penn to .9 bn.

Penn Series Funds, part of the 170-year-old Penn Mutual Life Insurance Company, has joined the likes of Morgan Stanley and Optimum Fund in marking down the value of shares in Flipkart.

For the quarter ended December 2016, the Pennsylvania based Penn has reduced the value of Flipkart shares by 34.51% on a year-on-year basis.

Penn reduced the value of each share to $93.15 per share in the December quarter of 2016, as against $142.24 per share in the corresponding quarter of previous year. However, on a sequential quarter basis, the value of shares went down by 3.25% from $96.2 a share in the September quarter of 2016.

Currently, Penn holds 7,206 shares in the company valued at $6,71,238, according to the mutual fund’s latest filings with US market regulator, SEC. This indicates the company’s valuation at around $9.9 billion. Penn Series Funds had invested in Flipkart since Series A through C, E, G and H.

Flipkart has till now cumulatively raised $3.15 billion with key investors being Tiger Global, DST Global, Nasper, Steadview Capital and Accel Partners. It reported combined losses of R2,851 crore on a revenue of R15,129 crore for FY16. It has cumulatively raised $3.15 billion till now with its last round of funding in June, 2015 of $700 million. The latest markdown of Flipkart by Penn comes close on the heels of several other marquee investors like Morgan Stanley, Vanguard, Valic and Fidelity giving a thumbs down to the Indian e-commerce poster boy. Recently co-founders Bansals were edged out of billionaire’s club after a series of markdowns of Flipkart by investors. In just a span of 15 days, three markdowns have been given to Flipkart valuation.

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FE had reported earlier that the home grown e-commerce major, is in the final stages of raising its latest round of funding in the range of $800 million to $1 billion from both existing and new set of investors but this is likely to come at a lower valuation of $7-8 billion. The serial markdowns by investors has come as a dampener for Flipkart as the company is looking to raise new funds to expand in tier 2 and tier 3 regions and fending off the competition from its closest competitor Amazon that has committed to pump in $5 billion in Indian market.

While on one hand Amazon is increasing its market share, on the another hand Paytm has been closing the gap with Flipkart as far company’s valuation is concerned. While Flipkart is seen slipping from its peak valuation of $15 billion a year ago, Paytm is notching up its valuation at a quick pace.

The company is also seeing a churn in top level management and business restructuring as seen in the case of Kalyan Krishnamurthy (former executive at Flipkart’s top investor Tiger Global) taking over from Binny Bansal as the new CEO.

– Sameer Ranjan Bakshi

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