The value of Flipkart drops by $5 billion. Understand why
According to stock transactions carried out by Flipkart’s US parent firm, Walmart, the business’s worth suffered a blow, falling by $5 billion (about Rs 41,000 crore) between January 2022 and January 2024.
During this time, Flipkart’s value has fallen from $40 billion to $35 billion.
The main cause of this downturn is the split between Flipkart and fintech company PhonePe, which is currently functioning as a separate business.
In spite of this loss, current projections place Flipkart’s worth in the $38–40 billion region. In the fiscal year 2022, Walmart lowered its stock share in Flipkart by 8%, or $3.2 billion, lowering the company’s valuation to $40 billion.
But by spending $3.5 billion in Flipkart during the fiscal year 2024, Walmart was able to raise its shareholding by 10% and ultimately reach around 85%. Walmart took this action as part of their strategy to strengthen their position in the Indian e-commerce business.
Flipkart, on the other hand, disputes Walmart’s stated value fall, arguing that it represents a fair adjustment in light of PhonePe’s 2023 split.
Flipkart, on the other hand, disputes Walmart’s assessment of the value decline and believes it is a reasonable adjustment given PhonePe’s 2023 separation.
“This reading is not accurate. News agency PTI cited a Flipkart representative as stating, “The PhonePe separation was completed in 2023, which saw an appropriate adjustment in Flipkart’s valuation.”
It is said by insiders that Flipkart’s intrinsic worth has not changed despite the reported fall. Following the split, PhonePe’s value increased to about $12 billion after raising $850 million from investors.
Additionally, Flipkart’s gross merchandise value (GMV) increased significantly year over year in 2023—by around 25 to 28 percent—which is thought to have had a beneficial effect on the company’s present value.
It’s important to remember, however, that Flipkart hasn’t had a formal valuation process since 2021. In FY23, the business reported a consolidated net total revenue of Rs 56,012.8 crore, a net loss of Rs 4,846 crore, and total costs of Rs 60,858 crore.
