Flipkart valuation dips by ₹41,000 crore in 2 years; here’s why
Upstox
2 min read • Updated: March 18, 2024, 12:04 PM
Summary
Flipkart, which is valued at $35 billion (₹2,90,000 crore) by its parent company Walmart, posted a consolidated net income of ₹56,012 crore in financial year 2022-23, while its losses stood at ₹4,846 crore.
The valuation of Flipkart declined by $5 billion or around ₹41,000 crore as of January 2024 compared to the same period in 2022, as per the equity transactions conducted by its US-based parent firm Walmart.
The company's valuation dipped to $35 billion as of January 31, 2024, declining from the $40 billion clocked in the fiscal year that ended on January 31, 2022.
Flipkart has stated that the reason for the decline in its value is the demerger of PhonePe, according to PTI. The report, citing sources, said Flipkart's current valuation is between $38 and $40 billion.
Walmart values Flipkart at $35 billion
In the financial year 2021-22, Walmart diluted 8% of its equity in Flipkart for $3.2 billion. The retail chain, however, said it has acquired shares worth $3.5 billion to increase its shareholding in Flipkart by 10% to approximately 85%, valuing Flipkart at $35 billion.
"During fiscal 2024, the company paid $3.5 billion to acquire shares from certain Flipkart non-controlling interest holders and settle the liability to former non-controlling 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," Walmart said.
Flipkart responded to Walmart's report by calling the decrease in valuation an "appropriate adjustment," PTI stated.
"This interpretation is incorrect. The PhonePe separation was completed in 2023, which saw an appropriate adjustment in Flipkart's valuation," a Flipkart spokesperson told PTI.
The source said the company's last valuation was done in 2021 when it raised funds. "In reality, if the valuation was to be done now for Flipkart, it would have gone by to the vicinity of $38-$40 billion considering the growth in gross merchandise value (GMV) and near profitability. But no such valuation exercise has happened for Flipkart since 2021," it added.
In FY23, Flipkart's consolidated net income was at ₹56,012.8 crore, while its losses stood at ₹4,846 crore.