Flipkart Valuation Declines Over INR 41,000 Cr In Two Years

Ecommerce giant Flipkart’s valuation declined by $5 Bn (INR 41,432 Cr) as of January 2024 compared to January 2022, as per equity transactions by its US parent Walmart. 

As per Walmart’s change in equity structure in Flipkart, the valuation of the ecommerce firm declined to $35 Bn as of January 31, 2024, from $40 Bn in the financial year ended on January 31, 2022.

Flipkart attributed its valuation decline to the demerger of fintech firm PhonePe into a separate entity. However, sources indicate that Flipkart’s current valuation ranges between $38-40 Bn, PTI reported.

In fiscal year (FY) 2022, Walmart diluted 8% equity in Flipkart for $3.2 Bn, reflecting an enterprise value of the e-commerce platform at $40 Bn.

In FY2024, the US retail giant increased its shareholding by 10% to approximately 85% by paying $3.5 Bn. This transaction suggests an enterprise valuation of Flipkart at $35 Bn.

“During fiscal 2024, the company paid $3.5 Bn to acquire shares from certain Flipkart noncontrolling interest holders and settle the liability to former noncontrolling interest holders of PhonePe. The company’s ownership of Flipkart increased from approximately 75% as of January 31, 2023, to approximately 85% as of January 31, 2024,” the report further said, quoting Walmart in a statement.

Flipkart responded to the decrease in valuation reported by Walmart, terming it an “appropriate adjustment” in the company’s valuation. A spokesperson from Flipkart clarified, stating, “This interpretation is incorrect. The PhonePe separation was completed in 2023, which saw an appropriate adjustment in Flipkart’s valuation.”

As per the report, Flipkart sources clarified that the last valuation, including PhonePe, was in 2021. They emphasised no change in Flipkart’s basic valuation.

PhonePe is now valued at over $12 Bn following an $850 Mn fundraising round involving investors such as General Atlantic, Tiger Global, Ribbit Capital, TVS Capital Funds, among others.

According to a Flipkart source, the company’s Gross Merchandise Value (GMV) saw significant growth, ranging from 25-28% year-over-year, reaching $29-30 billion in 2023. This surge is attributed to softer festival sales in 2022. The increased GMV is anticipated to have positively impacted Flipkart’s current valuation.

“In reality, if the valuation was to be done now for Flipkart, it would have gone by to the vicinity of $38-40 Bn considering the growth in GMV (Gross merchandise value) and near profitability. But no such valuation exercise has happened for Flipkart since 2021,” a source told PTI.

Meanwhile, Flipkart India Private Ltd, reported a 9% rise in operating revenue to INR 55,823.9 Cr in FY23 from INR 50,992.5 Cr in FY22. Its net loss rose to INR 4,845.7 Cr, a 1.4X increase from INR 3,404.3 Cr in FY22.