Business News: The valuation of ecommerce giant Flipkart has decreased by $5 billion or approximately Rs 41,000 crore since January 2022, based on equity transactions conducted by its parent company Walmart. As of January 31, 2024, Flipkart’s valuation stood at $35 billion, down from $40 billion in the previous financial year ending on January 31, 2022, due to changes in Walmart’s equity structure involving Flipkart.
The decline in valuation is largely attributed to the demerger of fintech entity PhonePe into a separate entity. However, industry sources estimate Flipkart’s current valuation to be in the range of $38-40 billion.
Walmart diluted 8 per cent equity in Flipkart for $3.2 billion in fiscal year (FY) 2022, reflecting an enterprise value of $40 billion for the e-commerce giant. However, in FY2024, Walmart increased its shareholding by 10 per cent to approximately 85 per cent by paying $3.5 billion, reflecting a reduced enterprise valuation of Flipkart at $35 billion.
Flipkart contested the decrease in valuation reported by Walmart, stating that it was an “appropriate adjustment” following the separation of PhonePe in 2023.
According to Flipkart sources, the last enterprise valuation exercise was conducted in 2021, which included PhonePe’s valuation. Since then, PhonePe was hived off from Flipkart, with its valuation increasing subsequently due to fundraising activities.
Currently, PhonePe is valued at over $12 billion after raising $850 million from investors including General Atlantic, Tiger Global, Ribbit Capital, and TVS Capital Funds.
Despite Flipkart’s GMV (Gross Merchandise Value) growing significantly by 25-28 per cent year-over-year to $29-30 billion in 2023, no valuation exercise has been conducted for Flipkart since 2021. However, based on the growth in GMV and near-profitability, Flipkart’s valuation is estimated to be in the range of $38-40 billion if evaluated presently.
In FY23, Flipkart reported a net loss of Rs 4,846 crore and consolidated net total income of Rs 56,012.8 crore, with total expenses amounting to Rs 60,858 crore during the fiscal year.