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Permalink Reply by Aditya Singh on July 30, 2011 at 10:35am

ha.. in 3 - 4 years

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Permalink Reply by Amit Gupta on July 30, 2011 at 10:43am

Who would have thought 10 years back that a bookstore can be more valuable company than giants like Jet Airways, Indiabulls etc.

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Permalink Reply by Daman Anand on July 30, 2011 at 11:10am

In Digital world, the speed to grow is also digital (fast).

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Permalink Reply by Abhishek Shah on July 30, 2011 at 11:28am

Alok you could consider start selling socks online now that e-comm is so hot in India :)

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Permalink Reply by Alok 'Rodinhood' Kejriwal on July 30, 2011 at 11:58am

:-)))))

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Permalink Reply by himanshu chanda on July 30, 2011 at 4:47pm

The market price of these companies from the bourses show the price a person is ready to pay TODAY to get a share of the company. Valuations of FlipKart show a remuneration that the investors expect to generate in the FUTURE ... Isnt there a difference...

The comparison still is interesting...

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Permalink Reply by Alok 'Rodinhood' Kejriwal on July 30, 2011 at 6:24pm

mistake himanshu - the price of 1 billion is WHAT IS BEING PAID TODAY for a private placement - what General Atlantic EXPECTS IN THE FUTURE will be at least 10 BILLION ++ 

 

That's going to be the real big challenge

 

Naukri raised a small round from Keiner Perkins just pre-ipo - they knew the price just around the bend...

 

So maybe Flipkart is already in acquisition stage and this is a quick ticket entry and exit...

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Permalink Reply by himanshu chanda on July 30, 2011 at 6:55pm

Aah agreed! The investor pours in a billion to expect more in the future. However that brings up another doubt....

 

The companies listed have to follow stringent norms from the bourses about their valuation and even throw their complete balance sheets to public scrutiny. Companies like Flip Kart or other startups have totally different and closed ways to estimate their true worth. I can expect valuations for FlipKart or a YouTube basis their sales trend or gained user base, but what about startups that get funded very early what are the metrics they follow? Does valuation happen more on comparison and gut feel?

 

Also FB for example has a gargantuan user base and we value it to billions, but say for example (and this is just an example) Google+ kills the whole party like FB did for Orkut. The online market then is very vulnerable and indecisive? How do investors calculate their risks?

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Permalink Reply by kanchan.kumar on July 30, 2011 at 10:27pm

@Alok - I have said it earlier and let me say it at the cost of repeating. There is no other logic for this valuation - except that it is a buy-out target from some biggie. May be Amazon itself!

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Permalink Reply by ramesh, ramakrishnan iyer on July 31, 2011 at 10:47pm

it seems like that some BIGGIE is also quite richie and dumbie! - for an internet book seller and retailer to grow like that in a few months is unprecedented and I wonder why no one is seeing that -or why even WSJ business writers and news analysts are "analyzing" the deal - may be we don't know the whole story...may be there is more to it!

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Permalink Reply by satish v iyer on July 30, 2011 at 6:50pm

some news articles say Flipkart revenues - 08-09 - Rs 4 crores, 09-10 - 25 crores and  10-11 was expected around 90 crores.

Revenue will be full cost of transaction ,cost of books.If in profit Can they earn profit of 20% on 90 crs (higher side) ? INR 18 Crores in YE 11. So valn of Rs 4500crores how much X of Profit?? Valn still more than the below??

PATNI Rev 2000crs, profit 500crores, market cap 4300 crs

HCL Rev 12000 crs profit 261 crs , market cap 1800 crs

Jet Airways Rev 13000 crs profit 9 crs market cap 3800 crs

But if you see NAUKRI.COM it may seem possible

Infoedge (naukri.com) Rev 300 crs profit 90 crs  market cap 4000 crores

 

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Permalink Reply by Alok 'Rodinhood' Kejriwal on July 30, 2011 at 7:29pm

Satish - to make the exit for General Atlantic (10x), and taking Naukri as an example - (where the PE is 40), the achieve a market cap of 45,000 crores for Flipkart , the PROFIT WILL HAVE TO BE 1000 CRORES

 

Now, 10 B is 1/10th of Amazon mcap.

 

So, to earn a NET OF 1000 crores on Book/Video/ etc at a 5% margin, Flipkart will need to sell 20,000 CRORES of stuff...

 

well...

 

(Ps - the comparison with youtube/foursquare/twitter/FB/linkedin is that FlipK is NOT an innovator on a platform nor first mover)

 

If duties come down to rational levels, then why cant amazon and zappos ship to india like they do everywhere?

 

I guess im too old fashioned for FlipKart and too forward looking for Zynga :-))))

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