US-based mutual fund hikes Flipkart valuation

Analysts had seen the slew of mark downs in Flipkart’s valuation by its investors as a signal towards seeking a change in the current growth-oriented but loss-making business model of the company.

Fidelity Rutland Square Trust II, a mutual fund investor in Flipkart, has marked up the valuation of India’s largest e-commerce company by 2.7 per cent to $84.29 per share in May, against a value of $82 apiece in February, according to latest filings.

The latest filing made by Fidelity dated July 26 pertains to the reporting period ending May 31. While Fidelity is only a small investor in Flipkart, its move differs from the recent ones wherein the online retailer’s valuation was marked down six times, including once by Fidelity, during this calendar year itself. For the February reporting period, Fidelity Rutland Square Trust II marked down Flipkart’s value by as much as 39.6 per cent compared with that in August 2015, according to a filing with the US Securities and Exchange Commission (SEC). The mutual fund valued Flipkart’s Series D stock at $82 a share in February, down from $103.97 apiece in November and $135.8 per share in August.

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Several of Flipkart’s other investors such as Morgan Stanley, Valic Co I, T Rowe Price and Vanguard have reduced the e-tailer’s valuation over the last six-to-seven months.

Analysts had seen the slew of mark downs in Flipkart’s valuation by its investors as a signal towards seeking a change in the current growth-oriented but loss-making business model of the company.

Amid the growing concerns made evident by its investors, in June Flipkart made an effort to ramp up its revenues and pare its losses by increasing the commission it charges the sellers on its marketplace by 5-6 per cent across several segments such as fashion and mobile accessories.