Flipkart's value drops by more than Rs 41,000 crore in just two years

Flipkart's US-based parent company Walmart has engaged out equity transactions that indicate the company's valuation decreased by $5 billion, or approximately Rs 41,000 crore, as of January 2024 compared to January 2022. A reduction in Walmart's ownership stake in Flipkart caused the e-commerce company's valuation to drop from $40 billion at the end of the fiscal year 2022 to $35 billion as of January 31, 2024. The demerger of fintech startup PhonePe into a distinct company was cited by the company as the reason for the drop in valuation.

The US retail giant in FY2024 increased its shareholding by 10 per cent to approximately 85 per cent by paying $3.5 billion, reflecting the enterprise valuation of Flipkart at $35 billion.

"During fiscal 2024, the company paid $3.5 billion 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 per cent as of January 31, 2023, to approximately 85 per cent as of January 31, 2024," Walmart said.

Flipkart, however, countered the decrease in valuation shown as per Walmart's report and termed it an "appropriate adjustment" in the company's valuation.

"Last valuation exercise was in 2021 when Flipkart raised funds. Since then PhonePe was hived off from Flipkart at a certain valuation (reflecting 2021 value). PhonePe's valuation has increased subsequently because they raised funds (valuation exercise is part of the fund raise). Flipkart's valuation remains at what it was in 2021 adjusting for PhonePe hive-off," a company source said.

PhonePe is now valued at over $12 billion after a $850 million fund raise from a group of investors including General Atlantic, Tiger Global, Ribbit Capital, TVS Capital Funds etc.