As another round of mutual funds cut the value of their stake in Flipkart, the company’s Executive Chairman and Co-Founder, Sachin Bansal says it is a theoretical exercise and would not worry too much about it.
“It is a theoretical exercise, which is not based on any real transaction in the space. I do not think valuations change because some small shareholders have changed their opinion. I do not think and worry too much about this,” said Sachin Bansal when quizzed about such markdowns at a conference recently.
Fidelity Rutland Square Trust II, a mutual fund managed by Fidelity Investments has marked the value of their Flipkart shares at $82 per unit for the February ended quarter, down 21.1% from $103.97 per unit assigned to them at the end of November 2015. This markdown pegs Flipkart’s valuation between $9.2 billion to $10.7 billion.
“If we do not need to raise funds, it is not important what others think. I think in the long term things will take care of themselves,” says Bansal.
This is the second consecutive markdown from both the mutual funds. Fidelity and Valic had earlier marked down their holdings in the company by 24% and 12% respectively in the previous quarter. A mutual fund managed by T Rowe Price had earlier marked down its shares of India’s most valued internet company Flipkart by 15%, after Morgan Stanley had resorted to such a move.
The news comes amidst a tight fund raising conditions in the startup ecosystem and Amazon posing a stiff challenge to Flipkart’s dominance. Bansal, however, says he is confident Flipkart has strength against competition. “This is true for every company that the only way to compete and win is through differentiation and that is what we are focusing on. Our aim is to understand the customer and the seller better and creating unique markets.” Michael Crabtree Womens JerseyShare This