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Investment firm Vanguard makes $15 M profit post Flipkart-Walmart deal

Sameer Ranjan
2nd Aug 2018
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Flipkart was valued at about $20.8 billion when Walmart acquired the former in May 2018. 

As Walmart and Flipkart are gearing up to close their deal in the office of CCI (competition commission of India), US-based mutual fund investor – Vanguard World Fund – that has invested in Flipkart, disclosed that it netted a handsome profit of about $15 million after the Flipkart’s valuation jump.

Flipkart valuation

In the recent US SEC (Securities and Exchange Commission) filings, the US-based mutual fund investor has marked its Flipkart shares at a varying price. While Vanguard World Fund marked its Series G shares at $155.3 per share of Flipkart, the Series H shares were marked at a valuation of $184.5 per piece.

Vanguard saw the valuation of its investment in Series G shares increased by $10.13 million to $4,42,51,000, and its investment in Series H shares brought it a valuation bump of $4.8 million to a total of $2,10,69,000.

However, Flipkart reported a 68 percent jump in losses to Rs 8,771 crore for the year ended March 2017 from the previous year, even though revenue at Flipkart group rose by 29 percent to Rs 19,854 crore. Vanguard World Fund has around four lakh shares in the company, as per the SEC filing.

The valuation of Flipkart at this peak level gave good returns to various investors including eBay, Tiger Global, Naspers, and others. Just hours after the Walmart-Flipkart deal was announced, US-based ecommerce major eBay said about its intention to sell its holdings in the former, which would give it gross proceeds of approximately $1.1 billion. Last year, eBay had invested over $500 million for a stake in Flipkart and had sold its India business to the latter.

Even South Africa-based Naspers netted $1.6 billion in profits from the sale of its 11 percent stake in Flipkart, post-Walmart deal.

While many US-based mutual fund investors value their holdings frequently, Flipkart has always termed the markups and mark-downs from mutual funds investors a “theoretical exercise”.

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