Moneycontrol
Dec 02, 2016 10:55 AM IST IST | Source: Moneycontrol.com

Vanguard follows Morgan, cuts Flipkart valuation by a third

US-based investment firm Vanguard Group has marked down its investment in e-commerce major Flipkart by a third, says an article in the Mint today.


Moneycontrol Bureau

In another blow to its fundraising efforts, the value of e-commerce major Flipkart has been marked down a second time within a few weeks. An article in the Mint today reports, US-based investment firm Vanguard Group has marked down the company’s value by a third, albeit valuing it slightly better at USD 7.3 billion compared to the USD 5.54 billion value assigned by Morgan Stanley-managed mutual fund, recently.


Vanguard had invested in Flipkart in 2014 and it currently holds 37,575 shares from the series G round and 16,044 shares from the series H round. In March, the valuation of its investment in Flipkart stood at about USD 11 billion. From USD 102.6 in March 2016, Vanguard has now valued Flipkart at USD 68.7 per share in September, translating to a cut in valuation of roughly 33 percent.


While Flipkart’s valuation has been marked down four times by Morgan Stanley in nine months, the magnitude of the latest cut by both Vanguard and Morgan Stanley is particularly worrying considering it has come at a time when demonetisation has already weighed down sales.


Also, constant mark-downs will mean new funds will have to be raised at far lower valuations. According to an earlier report by Mint, Flipkart had plans to hit the market before the end of the year to raise USD 500 million to USD 1 billion in fresh capital.

It becomes critical considering the company last raised cash at a valuation of USD 15 billion some 18 months ago.
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