Indian ecommerce leader Flipkart has been devalued by one of its investors, yet again. A mutual fund operated by Morgan Stanley has marked down the value of Flipkart’s shares by 38.2%, bringing its valuation down to $5.57 billion from $15.2 billion last year.
For those keeping the count, this is the 4th devaluation by Morgan Stanley; the previous ones being in February, May, and August. The etailer’s shares were last devalued by two American mutual funds Fidelity Rutland Trust II and Valic Co in November.
After this recent devaluation, the value of Flipkart’s shares has come down from $84.29 per share in March 2016 to $52.13 per share as of September 2016.
It is one bad news after another for the home-grown etailer. Besides the series of devaluations, there’s another negative trend which is hampering Flipkart’s growth. That is, the exit of top managers from the company.
The latest ones to leave Flipkart are Mausam Bhatt – Vice President, Product & Business and Peeyush Ranjan – Chief Technology Officer. While the reason behind Bhatt’s sudden exit is not known, Ranjan left the company for personal reasons and will soon be joining online home-stay network Airbnb.
“A few months ago, I had to move to the US due to personal reasons. Around that time, we had set up a research lab in Palo Alto that I was overseeing—we’re doing some very cool things in the lab there. However, due to the personal reasons I spoke about, around that time it became clearer that I would have to spend a considerable time in the US, which is why I have decided to move on,” explained Ranjan while talking about his departure from the company.
Flipkart’s chief financial officer Sanjay Baweja left the company in October. Anand KV, former senior vice president – customer experience left in August. Punit Soni and Manish Maheshwari resigned from Flipkart in April. The most shocking of all was Myntra co-founder Mukesh Bansal’s exit earlier this year.
When asked about the latest Morgan Stanley mark down, a Flipkart representative said,
“Mutual fund mark-to-market is a purely theoretical exercise and is not based on any real transactions. We are seeing a strong traction in our business momentum and operating performance. We continue to be focused on innovating for the customer, growing the market and executing on our long term growth agenda.”
It’s difficult to decipher if the above statement is a sign of confidence or denial. One can’t deny the fact that Flipkart has made some huge progress in terms of upgrading its technology and customer experience. Recently, the etailer earned the No. 1 ecommerce firm tag in the RedSeer E-tailing Leadership Index (ELI) survey.
But the heavy losses, top-level exits and devaluations tell a different story. A story that Flipkart doesn’t want anyone to read, especially the potential investors. The ecommerce biggie is going to step into the funding market soon to raise fresh funds. But experts believe that the much-coveted millions of dollars won’t come that easily this time around, because of Flipkart’s above mentioned issues.
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