Flipkart faces downgrade again

Morgan Stanley has slashed the value of Flipkart shares by 38.2 per cent, pegging the valuation of India’s most valuable internet company at 5.54 billion dollars (Rs 37902 crores) Morgan Stanley’s Flipkart shares are down 63.4 per cent in September 2016 as of June 2015.

This is the fourth consecutive markdown by Morgan Stanley, one of the bigger mutual fund investors in Flipkart and its largest to date, after a 27 per cent markdown in February this year. Prior to this, Flipkart has also witnessed a series of markdowns from other mutual fund investors like T Rowe Price, Fidelity and Valic over the past year.

This development comes at a time when Flipkart is looking to shore up capital to maintain its pole position in India against US rival Amazon that has significantly ramped up its Indian operations in terms of both product and investment. India's largest internet companies have struggled to raise capital at their existing valuations in a tough fundraising environment this year, after two years of hyper growth fuelled by a funding boom.

Flipkart is said to be in discussions with Walmart for an investment of up to one billion dollars, a deal which could potentially help both the companies take on Amazon in India.