Why Has Flipkart's Valuation Dipped $5B Per Walmart's Latest Calculations

Flipkart, the e-commerce behemoth, has seen a valuation dip by $5 billion, slipping to $35 billion from a previous high of $40 billion, according to a PTI report based on Walmart’s latest financial transactions.

What Happened: This decline, attributed to the spin-off of its fintech-focused sister company PhonePe into a standalone company, marks a significant adjustment in Flipkart’s market value as reported by its American parent, Walmart.

Walmart’s financial manoeuvres include diluting an 8% stake in FY22, valuing Flipkart at $40 billion, and later increasing its stake by 10%, reaching approximately 85% ownership with a $3.5 billion investment, thereby pegging Flipkart at the lower $35 billion valuation.

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Contrary to this, Flipkart challenges the notion of a valuation dip, attributing the perceived reduction to the strategic decoupling of PhonePe. Insiders assert that, sans the fintech firm’s value, Flipkart’s intrinsic worth remains steady, buoyed by robust growth metrics, especially in its Gross Merchandise Value (GMV). They cite a significant GMV uptick of 25-28% in 2023, propelled by festive season sales, hinting at a potential rebound in valuation to the tune of $38-40 billion.

Yet, despite these optimistic growth indicators, Flipkart’s financials reflect a challenging path to profitability, with a net loss of ₹4,846 crore against a consolidated net income of ₹56,012.8 crore in FY23.

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