The valuation of Flipkart has taken a hit, dropping by $5 billion (roughly Rs 41,000 crore) from January 2022 to January 2024 as per equity transactions conducted by its US parent company, Walmart.
Flipkart’s valuation has plummeted from $40 billion to $35 billion during this period.
The primary reason behind this decline is due to the separation of fintech firm PhonePe from Flipkart, now operating as an independent entity.
Despite this setback, current estimates suggest that Flipkart’s valuation ranges between $38-40 billion. Walmart reduced its equity stake in Flipkart by 8 per cent, valued at $3.2 billion, bringing down the company’s worth to $40 billion, in the fiscal year 2022,
However, in fiscal year 2024, Walmart took steps to increase its ownership in Flipkart by 10 per cent, reaching approximately 85 per cent ownership, by investing $3.5 billion. This step was part of Walmart’s efforts to bolster its position in the Indian e-commerce market.
Flipkart, on its part, contests the valuation decrease reported by Walmart, stating that it’s a reasonable adjustment following the separation of PhonePe in 2023.
However, Flipkart disagrees with Walmart’s report on the drop in valuation and think it’s a fair change due to PhonePe becoming separate in 2023.
“This interpretation is incorrect. The PhonePe separation was completed in 2023, which saw an appropriate adjustment in Flipkart’s valuation,” a Flipkart spokesperson was quoted as saying by news agency PTI.
Despite the reported decline, sources claim that Flipkart’s inherent value remains steady. PhonePe, post-separation, has seen its valuation rise to over $12 billion after securing $850 million in funding from investors.
Furthermore, Flipkart witnessed substantial year-over-year growth in Gross Merchandise Value (GMV) of around 25-28 per cent in 2023, which is believed to have positively impacted its current valuation.
However, it’s worth noting that no formal valuation exercise has been conducted for Flipkart since 2021. The company reported a net loss of Rs 4,846 crore and a consolidated net total income of Rs 56,012.8 crore in FY23, with total expenses amounting to Rs 60,858 crore.
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