From a peak of $15 billion in June 2015, e-commerce player Flipkart’s valuation is now down to less than $5.5 billion with Morgan Stanley marking it down to $5.37 billion. According to the mutual fund’s annual report, released on its website on Tuesday, the value of Flipkart shares was lowered by 3.1% to $50.51 per share as on December 31, 2016, from the earlier value of $52.13 per share as of September 2016.
This is the fifth downgrade by Morgan Stanley, which holds 1,969 shares in Flipkart; in February 2016, it had dropped the value by 27% to $103.97 per share. In the June quarter, Morgan Stanley had valued its holding in Flipkart at $84.29 a share. However, T Rowe Price, which holds shares in Flipkart through its Global Technology Fund, valued the business at $9.9 billion at the end of December 2016.
According to media reports, Flipkart is in the market to raise funds from Microsoft, PayPal Holdings, Tencent Holdings and eBay at a valuation of $10-12 billion. In June 2015, the online marketplace had raised $700 million from a clutch of investors including Tiger Global, Baillie Gifford, Greenoaks Capital and Steadview Capital.
In the year to March 2016, Flipkart Internet reported revenues of Rs 1,952 crore in 2015-16 but its losses nearly doubled to Rs 2,306 crore.
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In January this year, Kalyan Krishnamurthy took over as CEO, replacing Binny Bansal, who was appointed group CEO. This was the first instance of a non-founder running the operations at a local e-commerce company. Krishnamurthy was managing director at Tiger Global, the biggest investor in Flipkart. He is credited with having turned around the online retailer’s business through the smartphone category. For the year to March 2015, losses for a clutch of 49 companies crossed Rs16, 000 crore; only a handful of firms — BookMyShow, Jabong and Olx India — reported a profit.