Private Mutual Investor T Rowe Price has slashed the value of its investment in Flipkart. T Rowe Price has cut the value of its investment by 4%. It has thus cut the value of each of Flipkart’s share from $96.29 to $93.15. This is the second time that the mutual fund company has cut the price of its investment. It had marked down its investment by April, 2016, it had marked down the value if an investment by 15%. T Rowe Price now values Flipkart at $9.9 billion.
T Rowe Price had invested $100 million in Flipkart in the year 2014. Flipkart had raised in $700 million in that round of fundraising. Morgan and Stanley had cut the value of investments in Flipkart by 38.2% to value it at $5.54 billion. Analysts had brushed off their downgrade as Morgan Stanley held shares only worth a $100,000 dollars. Even the industry insiders of Flipkart said that this downgrade smelt of a sinister agenda to hurt the good name of Flipkart in the startup ecosystem.
However, when a major investor like a mutual fund T Rowe Price slashed its investment value in Flipkart, other investors are now sitting up and taking notice of this development. This will make it difficult for Flipkart to raise money in the future. This is very important for Flipkart considering the tough battle they are facing in increasing their revenue as compared to Amazon.
Flipkart has had a rough start to their year. First their founder lost his position as CEO to a person posted by an investor. Now none of the founders are in control of the company. Amazon has already moved past them in terms of revenue earned and rate of revenue growth. Amazon has already committed another $5 billion to its India unit. Now with this news of value cut, fundraising is going to be a big challenge. This news must top it for Flipkart as one of the worst January that they have or will face.