PhonePe Split Leads to Flipkart's Valuation Drop.?

Sindujaa D N
The market value of leading e-commerce company flipkart has experienced a significant decline of approximately Rs 41 thousand crore (5 billion dollars) over the last two years, between january 2022 and january 2024. This decline is attributed to Flipkart's decision to separate its fintech firm PhonePe into a separate entity.

According to reports on equity transactions by Flipkart's parent company Walmart, the valuation of flipkart stood at $40 billion in the fiscal year ending january 31, 2022. However, by january 31, 2024, this valuation had decreased to $35 billion due to the removal of PhonePe from Flipkart. It's worth noting that sources claim Flipkart's current market value is approximately $40 billion.


Walmart had sold an 8 percent stake in flipkart during the fiscal year 2022 for around $3.2 billion, while it increased its stake by 10 percent to 85 percent in the fiscal year 2023-24 by investing $3.5 billion in Flipkart. flipkart, however, has disputed the valuation based on Walmart's report, stating that separating PhonePe in 2023 led to adjustments in the market value. The last valuation of the company, conducted in 2021, included the valuation of PhonePe within Flipkart's total value.


 There has been no reduction in the overall valuation of the company. PhonePe's market value is currently estimated at $12 billion by various investors. In terms of financial performance, flipkart reported a net loss of Rs 4,846 crore in the fiscal year 2023. The total income of the e-commerce company was Rs 56,012.8 crore, while its total expenditure stood at Rs 60,858 crore during the same period.

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