• Flipkart stake marked down 15% by T Rowe Price

    A mutual fund managed by T Rowe Price has marked down its shares of India’s most valued internet company Flipkart by 15%, the second investment firm after Morgan Stanley to resort to such a move.

    T Rowe Price had first invested in the Bengaluru-based in December 2014, when the e-tailer announced a $700 million round of funding which also participation from sovereign wealth fund Qatar Investment Authority and Hong Kong-based hedge fund Steadview Capital.

    T Rowe Price’s markdown of its Flipkart shares is part of a global trend, as the mutual fund has slashed value of world’s most valued startups like ride hailing start up Uber Technologies and home rental website AirBnB.

    T Rowe marked the value of its Flipkart shares at $120.69 per unit, according to its filings made for March quarter, as compared to the value of $142.26 assigned to them at the end of December 2015.

    The markdown would peg Flipkart’s valuation close to $13 billion, as compared to the $15.2 billion when it last raised capital in July 2015.

    The markdown by T Rowe Price is not as drastic as Morgan Stanley, which said in a regulatory filing in February that it had valued its Flipkart’s shares at $103.97 a piece down from $142.24 a piece, pegging Flipkart’s valuation at $11 billion.

    Flipkart’s other key shareholders are New York-based investment firm Tiger Global Management, South African media giant Naspers, Singapore sovereign wealth GIC, Russian billionaire Yuri Milner’s DST Global and early stage investment firm Accel.

    The markdowns come at a time when India’s largest internet companies are facing a tougher fundraising climate, as Flipkart has been looking to shore up its new round of funding since late 2015.

    Flipkart is competing with US-based Amazon and local rivals like Snapdeal, Shopclues and PayTM to maintain its leadership position in the Indian e-tailing market, which Goldman Sachs projects will expand to $36 billion in 2016-17 from $11 billion in 2014-15.

    Shoring up new round of funding will be key to how aggressively Flipkart is able to fend off Amazon during the festive season in last quarter of 2016, when both the players hold their flagship sale events.

    Flipkart is already looking to build a much more leaner and focused organisation by September, as it is targeting gross profit by then by cutting burn rate and focusing on larger categories. 

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