US investment firm T Rowe Price has marked down its shares in India’s largest e-commerce company Flipkart by 15%. This is happening for the second time with Flipkart when its valuation has gone down. Earlier, when Morgan Stanley marked down its shares, it lowered down the valuation of the e-commerce venture from $15 billion to $11 billion. This is less than 27% markdown which happened in February by Morgan Stanley.
According to the filings made, T Rowe Price has marked the value of each Flipkart share at a price of $120.69 per unit at the end of March quarter, as compared to $142.26 in December quarter. This markdown would peg Flipkart’s valuation close to $13 billion, as compared to $15.2 billion when it last raised capital in July 2015.
T Rowe Price had first invested in Flipkart in December 2014, when the e-tailer announced a $700 million round of funding which also saw participation from sovereign wealth fund Qatar Investment Authority and Hong Kong based hedge view Steadview capital. According to the analysts, the two markdowns could compel Flipkart to raise its next round of funding at a lower price than the July raise.
T Rowe Price has also marked down its shares in Uber, world’s most highly valued privately held firm, by 6% and also in the home rental platform AirBnB.
Flipkart is in competition with another e-commerce giant Amazon. Amazon has put in a lot of focus on India and has also backed that up with a lot of investments. This has happened at a time when Flipkart is scouting for additional funds and has not been able to negotiate with any other investor.
Flipkart was estimated to be valued at $15 billion in June, and raised $700 million from Tiger Global and other investors. Other share holders of Flipkart are South African Media giant Naspers, Singapore sovereign wealth GIC.
Flipkart is looking to build more leaner and focused organization by September.