<article>Morgan Stanley Mutual Fund Trust, a mutual fund investor in Flipkart Ltd, has lowered its estimate of the online retailer’s valuation by 15.5% — the second successive quarter in a row.</article>

Morgan Stanley Mutual Fund Trust, a mutual fund investor in Flipkart Ltd, has lowered its estimate of the online retailer’s valuation by 15.5% — the second successive quarter in a row.
The fund marked down the value of its Flipkart shares to $87.9 per share as of 31 March 2016 from $103.97 per share as of 31 December last year. The December value was a 38.2% fall from $142.24 per share in June 2015, according to another regulatory filing by the firm in February.
This implies Morgan Stanley values Flipkart at $9.39 billion. Flipkart was valued at $15 billion when it received $700 million from Tiger Global Management, Qatar Investment Authority and other investors in June. That was its fourth round of fund raising in a year. Its valuation shot up roughly 5 times from $2.5-3 billion in May 2014.
Flipkart didn’t immediately respond to an email seeking comment.
Morgan Stanley is not the only fund to have marked down its stake in Flipkart.
In May, two small mutual fund investors at Flipkart marked down the company’s valuation. Valic Co 1 marked down Flipkart’s value by 29.4% as of February, compared with August 2015, according to a regulatory filing with the US Securities and Exchange Commission. Valic valued Flipkart’s Series D stock at $98 a share in February, down from $139 a share in August.
Fidelity Rutland Square Trust II marked down Flipkart’s value by as much as 39.6% as of February, compared with last August, according to a filing with the SEC. Fidelity valued Flipkart’s Series D stock at $82 a share in February, down from $135.8 a share in August.
In April, T Rowe Price disclosed in a filing that it cut the value of its stake in Flipkart by 15%.
To be sure, Fidelity and Valic hold very small amounts of Flipkart stock. Their holdings together are worth less than $6 million. That’s a minuscule fraction of Flipkart’s overall value.
But taken along with other markdowns by Morgan Stanley and T Rowe Price, both of which together own hundreds of millions of dollars worth of Flipkart stock, it confirms the view that Flipkart’s own investors believe the company is overvalued by a significant amount.
“We’ve not asked them (why they have marked down the valuation). They’re very small investors. It’s a global phenomenon; it’s not specific to Flipkart. The funds have their way of (calculating valuations) which isn’t clear. If in future they mark up our valuation by 30%, it’s not like we’re suddenly going to be happy. The way we look at it is that when we raise money, that’s when we get a valuation,” chief executive Binny Bansal told Mint in an interview on 24 May about the earlier mark downs.
Mint reported on 14 April that Flipkart has held funding talks with more than 15 investors over the past six months, all of whom have refused to invest in the company at its preferred valuation of $15 billion. Mint also reported then that Snapdeal (Jasper Infotech Pvt. Ltd), which is India’s second-most valuable Internet company, has also held talks with several new investors who have declined to put up money at Snapdeal’s asking price of $6.5 billion.
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India: Morgan Stanley fund cuts Flipkart valuation again to $9.39b

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