Big blow to Flipkart! Valuation plunges Rs 41,000 crore in 2 years | Here’s why
Bengaluru: E-commerce giant Flipkart’s valuation has plunged Rs 41,000 crore over 2 years to $35 billion as of January 31, 2024 compared to $40 billion in FY22, owing to a change in equity structure at global retail giant and parent company Walmart.
The Sachin and Binny Bansal founded e-commerce giant which competes with Jeff Bezos founded Amazon was acquired by Walmart in 2018 for a 77 per cent stake. Since then, the US-based retail giant has gradually hiked its stake in the e-tailer.
Why is Flipkart valuation down?
Flipkart’s valuation took a hit from the hiving off of payments company PhonePe. Parent company Walmart also sold off an 8 per cent stake in Flipkart for $3.2 billion in FY22. The e-tailer was valued at $40 billion at the time. In FY24, Walmart hiked its stake in the Bengaluru-based e-commerce giant by 10 per cent for $3.5 billion at a $35 billion valuation, the PTI reported, citing Walmart’s market filings.
Walmart’s stake in Flipkart now stands at 85 per cent. These shares were acquired from Flipkart noncontrolling interest holds even as the retail giant settled similar liabilities towards former noncontrolling interest holders in PhonePe, according to Walmart.
To be sure, Flipkart has termed the “interpretation” incorrect, stating that the PhonePe demerger was closed in 2023, the PTI reported. Walmart-owned payments company PhonePe secured $850 million in funding from General Atlantic, Ribbit Capital, Tiger Global and others at a valuation of $12 billion.
What is Flipkart’s valuation based on GMV?
To be sure, Flipkart’s valuation exercise has not been seen since 2021, according to people familiar with the matter. The e-commerce giant has witnessed significant gross merchandise value (GMV) growth in 2023 at 25-28 per cent on-year basis. The 2023 GMV was estimated at $29-30 billion.
Taking this into account, Flipkart’s valuation may be pegged at $38-40 billion. The Walmart-owned e-commerce giant’s FY23 net loss stood at Rs 4,846 crore while net income was at Rs 56,012.8 crore.
