Mutual fund T Rowe Price cut the value of its stake in Flipkart by 15%, becoming the second investor to mark down the online retailer’s estimated worth, according to a newspaper report.
T Rowe also cut the value of its stakes in Uber, the world’s most valuable venture backed company, and other start-ups, the Wall Street Journal newspaper reported, citing regulatory filings with the US Securities and Exchange Commission.
T Rowe’s markdown implies it values Flipkart, India’s most valuable e-commerce firm, at $12.75 billion. Flipkart was valued at $15 billion when it last raised $700 million from Tiger Global Management and other existing investors last June.
The mutual fund’s reported markdown is yet another confirmation of the view that India’s top e-commerce companies including Flipkart are overvalued.
In late February, Morgan Stanley Institutional Fund Trust, another mutual fund investor in Flipkart, slashed the value of its holdings by as much as 27%.
Flipkart has held funding talks with more than 15 investors over the past six months, all of whom have refused to invest in the company at its preferred valuation of $15 billion.Â Snapdeal , which is India’s second-most valuable Internet company, has also held talks with several new investors who have declined to put up money at Snapdeal’s asking price of $6.5 billion.
After pumping in more than $9 billion into Indian start-ups since the beginning of 2014, investors started pulling back late last year because of a mix of global macroeconomic factors such as a growth slowdown in China, as well as growing concerns over unproven business models.
This year, investor caution toward start-ups has increased manifold, resulting in an acute slowdown in funding, fall in valuations and even closures.