Flipkart Valuation Plunges By Over Rs 41,000 Crore In 2 Years, Walmart Report Reveals

The company’s valuation fell to $35 billion as of January 31, 2024, dropping from $40 billion valuation clocked in the fiscal year ended January 31, 2022

The decrease in valuation was attributed to the demerger of the fintech firm Phone Pe into a separate firm, Flipkart said

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E-commerce firm, Flipkart, saw its valuation plunge by nearly Rs 41,000 crore in the span of two years, according to the equity transactions conducted by its US-based parent company, Walmart. The company’s valuation fell to $35 billion as of January 31, 2024, dropping from $40 billion valuation clocked in the fiscal year ended January 31, 2022.

The decrease in valuation was attributed to the demerger of the fintech firm Phone Pe into a separate firm, Flipkart said, reported PTI. However, the report cited sources and said that the current valuation of the e-commerce entity stood in the range of $38 billion to $40 billion. 

Notably, Walmart diluted its equity of 8 per cent in Flipkart for $3.2 billion in the 2022 fiscal year, and later on, increased its stake in the entity by 10 per cent to nearly 85 per cent by paying $3.5 billion in the FY2024, indicating an enterprise valuation of the firm at $35 billion.

Flipkart called the decrease in valuation shown in Walmart’s report an incorrect adjustment. “This interpretation is incorrect. The PhonePe separation was completed in 2023, which saw an appropriate adjustment in Flipkart's valuation,” a company spokesperson said. 

The report cited Flipkart sources and stated that the exercise to measure the enterprise’s valuation was last conducted in 2021 and the overall value of the company included that of PhonePe as well. “There is no change in the organic valuation of Flipkart. Last valuation exercise was in 2021 when Flipkart raised funds. Since then PhonePe was hived off from Flipkart at a certain valuation (reflecting 2021 value). PhonePe's valuation has increased subsequently because they raised funds (valuation exercise is part of the fund raise). Flipkart's valuation remains at what it was in 2021 adjusting for PhonePe hive-off,” sources shared.

Currently, PhonePe is valued at more than $12 billion, after receiving $850 million in funds from a group of investors like General Atlantic, Tiger Global, TVS Capital Funds, etc.