Morgan Stanley Institutional Fund Trust, one of the mutual fund investors in Flipkart, has once again marked down its estimate of the company’s valuation. The markdown has come for the third consecutive time in the past six months.
Morgan Stanley reportedly values its Flipkart holdings at $84.3 a share as of 30 June, some 4 per cent lower from the preceding quarter. This is the third consecutive markdown by Morgan Stanley after reducing it by 15.5 per cent in previous quarter and by 27 per cent in the quarter before.
The markdown pegs Flipkart’s valuation at $9 billion, as compared to $9.4 billion in the previous quarter and $15.2 billion when it last raised capital in July 2015.
In the last few months, Flipkart’s valuation has seen multiple markdowns. For instance in July, Global asset manager T. Rowe Price Group Inc. reduced the value of its stake in Flipkart by a fifth, its second cut in four months. That valued Flipkart at $10.3 billion. The firm had earlier cut the value of its stake in Flipkart by 15 per cent in April.
Recently, US-based investment firm Vanguard Group marked down the value of its holding in Flipkart by 22 per cent, from $136.87 a share as on 30 September 2015 to $106.65 as on 31 March, according to regulatory filings with SEC, cutting the firm’s valuation to $11 billion.
In May, Morgan Stanley Mutual Fund Trust, a mutual fund investor in Flipkart, lowered its estimate of the online retailer’s valuation by 15.5 per cent for the second successive quarter in a row, implying that it valued the company at $9.39 billion.
However, Flipkart CEO Binny Bansal had previously said that (markdowns are) a theoretical exercise by small investors and they actually come into play when a company goes for a fresh round of fundraising.
Valic had marked up the value of its Flipkart shares by 10per cent for the May ended quarter, after initially reducing it for two consecutive quarters by 20.2 per cent and 12 per cent respectively.
Fidelity had also disclosed a marginal 3per cent markup in the value of its Flipkart shares for June quarter, after two consecutive markdowns earlier this year.