Morgan Stanley cuts Flipkart valuation by a steep 38% to just $5.54 bn

Morgan Stanley has marked down Flipkart's valuation  as much as 38 percent to $52.13 a share for the quarter ending September as against $84.29 a share in the previous quarter. With this markdown, the company's valuation stands at $5.54 billion. According to a filing by Morgan Stanley Select Dimensions Investment Series to the US Securities and Exchange Commission, the fund's shareholding in Flipkart (at 1,969 shares) is now valued at $102,644.

This also marks the seventh time that India's home-grown unicorn has had its valuation slashed down this year, of which four times was by Morgan Stanley. The latest from the Morgan Stanley fund is the steepest cut in the valuation.

Flipkart’s current valuation at $5.54 billion compares with $15.5 billion the company enjoyed during mid-2015.

The markdown comes at a time when Flipkart has repeatedly said that it is not looking at any fresh round of funding in the immediate future.

 Morgan Stanley cuts Flipkart valuation by a steep 38% to just .54 bn

Binny Bansal , CEO, Flipkart and Sachin Bansal , Executive Chairman

Repeated markdowns

India’s unicorn is losing its shine with repeated markdowns. Two days ago, its valuation was marked down by 25 percent by a mutual fund managed by the US-based investment firm Vanguard Group. It was joined by four other investors by slashing the holding value of its investment in Flipkart as much as 25 percent in the quarter through March, a VC Circle report said, citing filings with the US Securities and Exchange Commission (SEC).

From $136.87 a piece Vanguard bought on 30 September, 2015, it slashed its value to $102.65 as on 31 March, 2016. Following the markdown, the overall valuation of Flipkart now stands at around $11 billion. The fund also brought down the value of the shares it bought in the second tranche to $106.71 apiece from $142.23.

Besides this, a fund managed by Morgan Stanley reduced the value of its investments twice while Fidelity Rutland Square Trust II, Valic Co., and T. Rowe Price also each lowered the value once, the report said.

However, the company has been putting up a brave face. On the markdown in the valuation of Flipkart from $15.2 billion to $9.3 billion by Morgan Stanley and T Rowe Price in May 2016, chairman Sachin Bansal had said, “I do not think much of the markdowns. We should just focus on execution and keep our heads down on serving our customers."

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Updated Date: Nov 30, 2016 08:42:33 IST