Flipkart valuation declines by $5bn 

Walmart diluted 8% of Flipkart equity by $3.2 billion in fiscal year (FY) 2022, recalling the e-commerce firm’s enterprise value of $40 billion.

E-commerce giant Flipkart, owned by US-based retail giant Walmart, has seen a significant decline in its valuation, according to recent equity transactions.

Walmart’s latest filings reveal that Flipkart’s valuation dropped by $5 billion or approximately Rs 41,000 crore as of January 2024 compared to January 2022.

Valuation Decline

The valuation of Flipkart fell to $35 billion as of January 31, 2024, down from $40 billion in the previous fiscal year ending January 31, 2022. 

This decline in valuation is attributed to Walmart’s change in equity structure following the demerger of fintech firm PhonePe into a separate company. However, industry sources estimate Flipkart’s current valuation to be in the range of $38-40 billion.

Equity Transactions

In FY 2022, Walmart diluted 8% equity in Flipkart for $3.2 billion, reflecting the e-commerce giant’s enterprise value at $40 billion. 

However, in FY 2024, Walmart increased its shareholding by 10%, bringing it to approximately 85%, by paying $3.5 billion. This transaction was made to acquire shares from certain Flipkart noncontrolling interest holders and settle liabilities related to former noncontrolling interest holders of PhonePe.

Ownership Increase

Walmart’s ownership of Flipkart rose from around 75% as of January 31, 2023, to approximately 85% as of January 31, 2024. This strategic move underscores Walmart’s commitment to strengthening its position in the e-commerce market, despite the valuation decline.

The fluctuating valuation reflects the dynamic nature of the e-commerce sector and the various strategic decisions made by stakeholders. Despite the decline, Flipkart remains a key player in India’s rapidly evolving online retail landscape.