What's Behind the Significant Drop in Flipkart's Valuation?

Flipkart a well-known Indian e-commerce giant has dealt a decline in its value by approximately ₹41,000 crore or $5 billion since January 2022.

Image source TradeFlock

This drop is attributed to changes in Walmart's ownership structure and the separation of its fintech arm, PhonePe, into a separate entity.

Walmart, which owns about 85% of Flipkart, reduced its stake by 8% in FY2022, valuing Flipkart at $40 billion. However, in FY2024, Walmart increased its stake by 10%, paying $3.5 billion, which suggests Flipkart's current value at $35 billion.

Image source Walmart Corporate

Flipkart disputes the reported valuation decrease, attributing it to the separation of PhonePe. The company claims its organic value has remained unchanged since 2021, estimated to be between $38-40 billion.

Despite these changes, Flipkart experienced significant year-over-year growth in Gross Merchandise Value (GMV) in 2023, estimated at $29-30 billion, a 25-28% increase compared to 2022. This growth was driven by increased festival sales.

Flipkart reported a net loss of ₹4,846 crore and a close net income of ₹56,012.8 crore in FY23, with total expenses reaching ₹60,858 crore.

PhonePe, now valued at over $12 billion, received $850 million in funding from various investors, including General Atlantic, Ribbit Capital, Tiger Global, and TVS Capital Funds.