Morgan Stanley Fund Cuts Valuation of Its Holding in India's Flipkart
November 30 2016 - 8:03AM
Dow Jones News
By Corinne Abrams and Newley Purnell
MUMBAI -- A Morgan Stanley Investment Management Fund has
slashed the valuation of its holding in India's leading e-commerce
firm Flipkart Internet Pvt. by 38%, as the startup faces increased
competition from U.S. rival Amazon.com Inc. and others.
In a filing this week to the U.S. Securities and Exchange
Commission for the quarter ended Sept. 30, the fund called the
Morgan Stanley Select Dimensions Investment Series said it held
1,969 shares in the company, which it valued at $102,644, or $52.13
a share.
For the quarter ended June 30, the company reported it had the
same number of shares, 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 said 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
up 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 as consumers
increasingly get online for the first time via inexpensive
smartphones. Founder Jeff Bezos has pledged to spend billions of
dollars to win the country's market, with the company splashing out
on advertising and expanding its network of warehouses. Analysts
say Amazon is stealing market share from Flipkart.
This isn't the first time Flipkart has had its valuation cut.
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 07:48 ET (12:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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