It seems like the market conditions are getting hostile day-by-day for Indian ecommerce giant Flipkart as Vanguard, one of the investors of Flipkart has slashed down the value of its stock by 25 per cent. The company has marked its Flipkart shares down by US $102.6 as of March 2016, this means that their Flipkart’s shares value have taken a dip of US $34.27 as compared to December 2015 when they were valued at US $ 136.87.
This has set an alarm for Indian ecommerce leader as this also means that the company’s valuation will decline to US $11.4 billion, which was hovering around US $15.2 billion last year. Though Vanguard currently holds a very small portion of shares in Flipkart valuing less than US $6 million, but its mark down clearly suggests that the company has been taken for a big toss by its investors.
This however follows a series of markdowns from larger investors Morgan Stanley and T Rowe Price. Morgan Stanley had marked down its holdings by 15.5 per cent in May, after marking it down by 27 per cent in February this year.
Flipkart's other key shareholders include New York-based investment firm Tiger Global, South African media giant Naspers, Singapore sovereign wealth GIC, Russian billionaire Yuri Milner's DST Global and early stage investment firm Accel.
Earlier, Binny Bansal, CEO, Flipkart had came out strongly and defended the company. While explaining to one of the renowned dailies, Bansal said that these markdowns are mostly a theoretical exercise by small investors. From company’s perspective, valuation is when it raises money. When company raises money, its value will be clear in the market.