Morgan Stanley marks down India's Flipkart four quarters in a row
A Morgan Stanley mutual fund has once again marked down its investment in Flipkart, cutting another 38.2% off its valuation of the India-based e-commerce marketplace.
The fund said in a regulatory filing that its small minority interest in Flipkart was worth $52.13 per share as of September, down from $84.29 in June. Twelve months before that, in June 2015, the valuation was $142.24 per share. This is the fourth consecutive quarterly markdown and, according to The Economic Times, it takes the overall valuation of Flipkart to $5.5 billion.
Morgan Stanley first invested in the company in 2013, as part of a consortium that contributed $360 million in all. It also participated in a $1 billion round in July 2014 led by existing investors Tiger Global and Naspers. Following a $700 million funding round in July of last year from Tiger Global and other backers, Flipkart claimed a valuation of $15.2 billion.
Several other investors have also marked down their Flipkart positions in recent quarters. T. Rowe Price valued the company at $96.29 per share as of September, consistent with the June figure, but down from $120.70 in March. Like Morgan Stanley, it had reported a value of $142.24 as of December 2015. Other markdowns are said to have come from Fidelity, Valic and Vanguard, although not to the same extent as Morgan Stanley.
These mutual funds do not disclose their exact methods for calculating the valuations of portfolio companies. They are believed to rely on a mix of the companies' financial information, market values of listed firms in the same industry, and the previous share price.
Last month, SoftBank marked down the value of part of its investment portfolio, including holdings India-based ride-hailing app Ola and its e-commerce counterpart Snapdeal. It reported a loss of JPY58.1 billion ($550.7 million) for the six months ended September as a result of changes in the fair value of preferred stock in these and other companies. Over half this loss was attributed to appreciation in the yen.
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