FLOWS TO E-COM­MERCE SLOW DOWN

The Financial Express - - FRONT PAGE -

WITH

on­line gro­cer BigBas­ket pick­ing up $150 mil­lion from a clutch of new and ex­ist­ing in­vestors, deal flow in the e-com­merce and in­ter­net spa­ces picked up; else 2016 so far has been some­what dull, re­ports fe Bureau in Mum­bai. In­flows in Fe­bru­ary stood at $218 mil­lion, down 16% year-on-year and mean­ing­fully be­low the av­er­age monthly fund in­flows in CY15 of $412 mil­lion. Ko­tak In­sti­tu­tional Eq­ui­ties noted that while De­cem­ber and Jan­uary are sea­son­ally weak since funds are typ­i­cally as­sess­ing per­for­mance and fi­nal­is­ing their in­vest­ment plans for the year, the per­sist­ing weak­ness in Fe­bru­ary 2016 is a clear in­di­ca­tor of a slow­down.

“The bulk of the Feb ’16 fund­ing com­prised $200 mn raised by Snapdeal, with prac­ti­cally no other ma­jor fundrais­ings seen,” the re­port said.

Nev­er­the­less, 2016 could turn out to be an ex­cit­ing year if Alibaba , which is an in­vestor in One 97 Com­mu­ni­ca­tions and Snapdeal, en­ters In­dia as an on­line mar­ket­place player. On March 18, Alibaba group pres­i­dent J Michael Evans told newsper­sons the Chi­nese e-com­merce player was plan­ning to en­ter the ecom­merce busi­ness in In­dia in 2016, say­ing the op­por­tu­nity was ex­cit­ing against the back­drop of Dig­i­tal In­dia. Me­dia re­ports say Alibaba may have ap­proached Tata Sons for a pos­si­ble partnership.

Mean­while, how­ever, in­vestors are turn­ing cau­tious.

In Jan­uary, Mor­gan Stan­ley In­sti­tu­tional Fund Trust, a mi­nor­ity in­vestor in Flip­kart, dis­closed a write-down in the value of its hold­ings in the com­pany by as much as 27% in a fil­ing with the Se­cu­ri­ties and Ex­change Com­mis­sion (SEC). Flip­kart was val­ued at $15 bil­lion when it re­ceived $700 mil­lion from Tiger Global Man­age­ment, Qatar In­vest­ment Au­thor­ity and other in­vestors in June. Mor­gan Stan­ley’s lat­est es­ti­mate im­plies the mu­tual fund now val­ues Flip­kart at $11 bil­lion.

In­ter­est­ingly, app rank­ing data from App An­nie show that e-tail­ers dropped out of the top-10 rank­ing for the first time in the past four months in Fe­bru­ary. Fur­ther, Ama­zon over­took Flip­kart to emerge as the highest ranked e-tailer app.

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