Flipkart valuation decreases by more than ₹41,000 crore

According to information derived from transactions conducted by its parent company Walmart in the United States, the valuation of the e-commerce giant Flipkart has experienced a decline, decreasing by $5 billion or approximately ₹41,000 crore since January 2022.

As of January 31, 2024, Flipkart’s valuation is reported at $35 billion, down from $40 billion in FY22, reflecting changes in Walmart’s equity structure. The decline in value is primarily attributed to the separation of fintech firm PhonePe into an independent entity. However, sources suggest that Flipkart’s current valuation falls within the range of $38-40 billion.

Walmart’s equity transactions shed light on these changes. In FY2022, Walmart diluted 8 percent of its equity in Flipkart for $3.2 billion, valuing Flipkart at $40 billion. Conversely, in FY2024, Walmart increased its stake by 10 percent to about 85 percent, paying $3.5 billion, indicating Flipkart’s valuation at $35 billion.

Walmart clarified its actions, stating, “During fiscal 2024, the company paid $3.5 billion to acquire shares from certain Flipkart noncontrolling interest holders and settle the liability to former noncontrolling interest holders of PhonePe.” Flipkart disputes the reported valuation decrease by Walmart, asserting that it was an “appropriate adjustment” following PhonePe’s separation in 2023.

Flipkart insiders maintain that the company’s organic valuation has remained steady since 2021, with PhonePe’s value factored into the valuation exercise. PhonePe, now valued at over $12 billion, attracted investments totaling $850 million from various investors.

Despite the reported valuation dip, Flipkart sources highlight significant year-over-year growth in Gross Merchandise Value (GMV) in 2023, estimated at 25-28 percent YoY to $29-30 billion. This growth, driven by increased festival sales compared to 2022, could positively impact Flipkart’s valuation.

In FY23, Flipkart reported a net loss of ₹4,846 crore and a consolidated net income of ₹56,012.8 crore, with total expenses amounting to ₹60,858 crore. Despite financial challenges, Flipkart’s GMV growth and near profitability indicate resilience in its market performance.