Fidelity Investments has become the latest fund to mark down the value of Indian e-commerce firm Flipkart, slashing the valuation of its holdings by more than a third in November.
The investment fund cut its valuation by 36 percent, a filing by the fund reveals, valuing Flipkart at $5.58 billion, as per the available record of outstanding shares, Mint newspaper reported.
The news comes just months after a Morgan Stanley fund marked down its interest in Flipkart, slashing it by about to $52.13 a share, down from $84.29 a share in the June quarter.
Flipkart faces increasing competition from Amazon.com Inc’s Amazon India. It follows a string of similar moves by mutual funds and investors in the last year, local media have reported.
In a recent interview with Mint, Flipkart co-founder and executive chairman Sachin Bansal said valuation markdowns were just “theoretical exercises” and that Flipkart was not concerned about the consecutive markdowns.
However the timing may prove inopportune for Flipkart, who are in the process of initiating a further round of funding. In October Mint reported that Flipkart was in talks with existing and new investors to raise anywhere between $500 million to $1 billion in fresh funds by the end of the current financial year. The Indian unicorn may now need to raise money in a ‘down round’, at a lower valuation than the previous round.