Morgan Stanley Fund Cuts Valuation of Its Holding in India's Flipkart
November 30 2016 - 12:50PM
Dow Jones News
MUMBAIāA Morgan Stanley investment fund has reduced the
valuation of its holding in Flipkart Internet Pvt. by 38%, as
India's leading e-commerce faces increased competition from U.S.
rival Amazon.com Inc. and others.
In a U.S. regulatory filing this week, the Morgan Stanley Select
Dimensions Investment Series fund said for the quarter ended Sept.
30, it held 1,969 Flipkart shares, which it valued at $102,644, or
$52.13 a share.
For the preceding quarter, the fund reported the same number of
shares in the startup, but valued them at $165,967, or $84.29 a
share
In a statement, a Flipkart spokeswoman said the Morgan Stanley
fund's markdown was a "purely theoretical exercise" that is "not
based on any real transactions."
The spokeswoman also said that Flipkart is "seeing a strong
traction in our business momentum and operating performance."
Flipkart, which was founded in 2007, has for years been India's
top online seller of goods ranging from smartphones to cooking
utensils to clothing.
Investors like U.S.-based Tiger Global Management have poured
funds into the Bangalore-based firm, pushing its valuation as high
as $15 billion on optimism India's internet economy will take off
the way China's did.
But Amazon has been piling on the pressure of late as it seeks
growth in the country of more than 1.2 billion, where growing
numbers of consumers are going online for the first time via
inexpensive smartphones.
Amazon founder Jeff Bezos has pledged to spend billions of
dollars to score with Indian consumers by increasing advertising
and expanding its network of warehouses.
Analysts say Amazon is stealing market share from Flipkart.
This isn't the first time Flipkart has suffered a cut in its
valuation.
Earlier this year, three funds with small stakes in the company
slashed as much as 23% off the value they gave their holdings.
Write to Corinne Abrams at corinne.abrams@wsj.com and Newley
Purnell at newley.purnell @wsj.com
(END) Dow Jones Newswires
November 30, 2016 12:35 ET (17:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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