Morgan Stanley marks down Flipkart's valuation again

Moneycontrol Bureau

The spate of markdowns in valuation of Flipkart does not seem to be ceasing. On Friday, Morgan Stanley marked down the valuation of e-commerce retailer's shares by 15.5 percent. The markdown -- the second time Morgan Stanley has done so -- effectively brings down Flipkart’s valuation to USD 9.39 billion from the highs of USD 15.2 billion in June 2015.

Morgan Stanley Institutional Fund has valued its shares in Flipkart at USD 87.9 per share in March from USD 103.97 a share in December 2015. The fund had valued the e-tailer’s shares at USD 142.24 per share in June 2015.

This is fourth markdown for Flipkart over the past six months. According to filings with the US Securities and Exchange Commission, Fidelity Rutland Square Trust II — the mutual fund managed by Fidelity Investments — had lowered the value of Flipkart shares it owns by almost 40 percent to USD 82 apiece as of February 29, 2016, from USD 135.8 in August 2015. Similarly, Valic marked down the value of its investment in Flipkart by 29 percent to USD 98.19 a share from USD 139 apiece.

Since the beginning of 2014, Indian start-ups have amassed more than USD 9 billion in investments. However, investors started to curb or withdraw late last year due to a couple of factors such as China’s growth slowdown and worries over business models of start-ups.

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Recently, HSBC Securities and Capital Markets (India) too had slashed the valuation of restaurant search service Zomato by 50 percent  to USD 500 million.