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US-based fund houses Vanguard and Valic value Flipkart at $15 B – $19 B

Sameer Ranjan
3rd May 2018
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Flipkart was last valued at about $12.5 billion when it raised $2.5 billion from Masayoshi Son’s SoftBank Vision Fund in August 2017.

As reports of Flipkart’s imminent acquisition by Walmart and also Amazon gather steam, global mutual funds are joining the ranks in their assessment and valuation of India’s e-commerce poster boy.

US-based fund house Valic, which holds around 4,502 shares in Flipkart, and Vanguard World Fund, which has four lakh shares, have pegged the valuation of the e-commerce company between $15 billion and $19 billion. The firm was last valued at about $12.5 billion when it raised $2.5 billion from Masayoshi Son’s SoftBank last year. It had been valued at $15.2 billion in 2015 when it raised $700 million from investors including Tiger Global and Steadview Capital.

In recent US SEC filings, Valic and Vanguard have marked their Flipkart shares at varying prices. While Valic marked the shares at $87.6 apiece (for its series ‘A’ investment) and $118.3 (for its series ‘G’), Vanguard World Fund marked them at $119.7 (Series ‘G’) and $142.2 (Series ‘H’).

Also, media reports citing sources said Amazon has made a formal offer to buy a majority stake in Flipkart. The US e-commerce major has offered to purchase a 60 percent stake and as part of the proposal, Amazon is seeking a non-compete agreement from Flipkart’s founders, reports added. Reports already state that US-based retail giant Walmart is looking to buy a significant stake in the Indian e-commerce company.

SoftBank, Flipkart’s largest shareholder, has reportedly been pushing other investors to wait for a rival offer for Flipkart from Amazon.

Flipkart reported a 68 percent jump in losses to Rs 8,771 crore for the year ended March 2017, while revenue rose by 29 percent to Rs 19,854 crore.

A recent ET report said Flipkart has set aside $400 million to buy back shares from small investors as it seeks to regain its private limited company status in Singapore. Flipkart is registered as a public company in Singapore, and needs to reduce the number of its shareholders to below 50 to be recognised as a private limited company in the Southeast Asian country, said the report.

Flipkart has termed the markup and markdown by mutual funds as a “theoretical exercise”.

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