After Morgan Stanley, Macquarie Arm Marks Down Flipkart Valuation
Macquarie’s Optimum Fund values Flipkart at $9.95 billion.
India’s largest online marketplace Flipkart’s markdown blues are far from over. Now, Macquarie Group’s Optimum Fund has slashed the value of its stake in India’s largest online marketplace by 3.26 percent to $9.95 billion, according to the fund’s filings with the U.S. Securities and Exchange Commission (SEC).
Optimum Fund, slashed the value of Flipkart’s shares to $93.15 apiece as of December 2016, from $96.29 in September. The U.S.-based mutual fund currently holds 18,850 shares through its investments across five rounds, including Series A, C, E, G and H, as per its fillings.
The fund has marked down its valuation by over 31 percent in one year from its highest level of $135.12 apiece in the quarter-end December 2015.
Flipkart’s Markdown Blues
In fact, markdowns have become all too common for ‘India’s most valuable e-commerce company’, which was once valued at $15.2 billion back in July 2015. Since then it has suffered several valuation markdowns.
Most recently, Flipkart saw its sixth consecutive markdown by a mutual fund managed by Morgan Stanley which reduced the value of its stake to $5.37 billion. The fund has reduced the value of its stake by as much as 67 percent, from its highest point of $142.24 per share in the quarter-ended June 2015.
American asset management firm T Rowe Price, Fidelity Mutual fund, Vanguard Group, and Valic Co. have lowered the value of their holdings in Flipkart at least once in the past 12 months.
Markdowns are very much in the nature of the business, Kunal Khattar, partner at an early stage venture capital firm, advantEdge said over the phone. He added that the disparity in valuations comes due to the funds having different criteria and variables to determine the value of their investments.
“Valuation is determined on two occasions. One, when there is an investment coming in, and two, by existing shareholders to determine the value of their existing portfolios; it is more a mark-to-market exercise. The difference arises as some funds are more conservative and other are aggressive in their approach,” added Khattar.
Flipkart is not alone. 2016 has been tough for Indian unicorns or companies valued upwards of a billion dollars. Japanese investment giant Softbank last month reported a valuation loss of 39.3 billion yen ($351 million) in two of its biggest bets in the country, cab-hailing firm Ola and e-commerce marketplace Snapdeal.
These markdowns also come at a time when most of these companies seek to raise more funds.