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19 Comments

1. 

   Aditya Singh July 30, 2011, 5:05 am

   ha.. in 3 – 4 years

2. 

   Amit Gupta July 30, 2011, 5:13 am

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

3. 

   Daman Anand July 30, 2011, 5:40 am

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

4. 

   Abhishek Shah July 30, 2011, 5:58 am

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

5. 

   Alok Rodinhood Kejriwal July 30, 2011, 6:28 am

   :-)))))

6. 

   himanshu chanda July 30, 2011, 11:17 am

   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…

7. 

   Alok Rodinhood Kejriwal July 30, 2011, 12:54 pm

   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…

8. 

   satish v iyer July 30, 2011, 1:20 pm

   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

    

9. 

   himanshu chanda July 30, 2011, 1:25 pm

   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?

10. 

    Alok Rodinhood Kejriwal July 30, 2011, 1:59 pm

    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 :-))))

11. 

    kanchan.kumar July 30, 2011, 4:57 pm

    @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!

12. 

    ramesh, ramakrishnan iyer July 31, 2011, 5:17 pm

    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!

13. 

    Aditya Babbar August 1, 2011, 12:13 pm

    I hope so too Neil.

     

    This new-valuation business sorta points to a bubble !

14. 

    Aditya Babbar August 1, 2011, 12:18 pm

    Not for a Second, this makes sense.

    I mean really FlipKart more valuable than Conglomerates, Airlines, Real Estate and Infrastructure (including Power) and beat this EVEN Banks !

    I  will never understand the concept of this sort of valuation. 

     

    Its just purely misleading and somehow a recipe for disaster (or a bubble too)!

15. 

    Jack John August 17, 2011, 3:53 pm

    This valuation does not make any sense to me At initial stage of company,It grows with high Growth percentage as the valuation is less the percentage of the profit is high but its hard to sustain every companies growth goes through the maturation point where every thing start normalize and it gives nominal profit percentage ratio for a initial start up company , to increase profit from 7cr to 14 cr might be easy ie 100% growth but to keep the same percentage ration growth from 40cr becomes difficult..

    there are organisation better than flipkart which have good prospect

16. 

    Rahul Chhajer August 19, 2011, 8:35 am

    Check out this Link:https://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?Fro…

     

    This link shows how E-commerce Cos violates Accounting Practices…

    Courtesy: The Economic Times, 17th August, 2011

17. 

    Rajan Chandi August 19, 2011, 1:58 pm

    Well, It seems valuable if it can continue it’s momentum towards being Amazon of India.

    AMZN can easily acquire them for $1 Bn.

    Well defined acquisition possibility gets them the current valuation.

    Moreover, they’re growing successfully into adjacent markets like consumer electronics consistently towards becoming India’s Amazon.

    Overall, It is a fair valuation consisting a huge prospects of growth as spending of the country increases.

18. 

    Abey John September 10, 2011, 9:10 am

    Andrew Mason feels slimy in interviews.  The email he sent to Groupon staff was long on rhetoric and played loose with the facts.  He said that their cost of customer acquisition is high because once they have the email address of the prospect they don’t have to spend anything to acquire that email id ever again.  False.  An inactive prospect email id dies within 6 months so they need to get on the marketing bandwagon again.  Groupon looks like it is headed for the rocks.  They tried some fancy Big 5 accounting sleight of hand but that failed and they’ve put the IPO on hold.  They arent’ going to survive.

19. 

    Alok Rodinhood Kejriwal June 26, 2012, 11:45 am

    read = https://www.therodinhoods.com/forum/topics/what-would-have-happened-to-instagram-if-it-wasn-t-acquired-by-fa

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