Fidelity Marks Down Flipkart Value

Recently, mutual fund Fidelity Rutland Square Trust II has reportedly marked down the value of its holding in Flipkart, the major Indian eCommerce company.

Fidelity decreased the valuation of its holding in Flipkart by about 36 percent, said Reuters, from $81.55 per share in August down to $52.13 per share or a total of about $5.58 billion.

This is the second markdown by a major holder in the past few months. In December, Morgan Stanley Investment Management Fund cut the valuation of its holdings in the company by 38 percent, likely due to increased competition from Amazon.

Morgan Stanley Select Dimensions Investment Series said its position in the company is 1,969 shares valued at $102,644, or $52.13 a share. For the quarter ended Jun. 30, the investment fund held the same number of shares, but they were valued at $165,967, or $84.29 a share.

Other Flipkart investors have reportedly taken similar measures.

The valuation cuts come at a time of change to Flipkart’s top management. The company has switched up its top management positions for the twice in the past year following a series of valuation write-downs across 2016.

In the latest switch-up, Kalyan Krishnamurthy, former managing director of Tiger Global, was reportedly named the new CEO of Flipkart after joining the company this past June. Current CEO Binny Bansal, named CEO in the last shake-up in June, was moved into the new role of group CEO.

There’s been talk the industry about the possibility of Flipkart going public in the U.S., which would be a major move from an Indian company looking to make its mark abroad.

The eCommerce industry in India is booming, expected by many to hit between $60 to $70 billion by 2019, up from $17 billion in 2014. In 2014, Amazon first announced an investment of $2 billion to expand its operations in India. Since then, the global eCommerce giant has committed to re-upping those investments in what has become a key emerging marketplace.



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