US funds lower valuation of Indian unicorns Paytm, Ola due to Covid: Report

The funds, T Rowe Price and Vanguard, hold about 1% in both companies; while Paytm's valuation has taken a 26% hit, Ola's has suffered a 50% drop

US-based mutual funds T Rowe Price and Vanguard have lowered their valuations of Indian unicorn companies Paytm and Ola, due to the disruption created by the Covid-19 pandemic in the first half of the year, according to a report by Times of India, which cited regulatory filings.

These mutual funds hold about one per cent stake in both the companies.

Paytm was valued at around $16 billion when it raised funding last year. T Rowe Price had invested about $150 million in digital payments firm Paytm in December 2019. According to the report, T Rowe Price has reduced the value of its share in Paytm by 26 per cent as of June 2020. According to the filings, the shares which were each purchased for $254 have now been valued at $188 by multiple funds managed by T Rowe Price, according to the filings.

Ride-hailing firm Ola was valued at $6.5 billion when it raised funding from vehicle maker Hyundai last year. But it has faced a bigger impact due to the Covid-19 pandemic. The SoftBank backed firm has seen the valuation of its shares fall by nearly 50 per cent by Vanguard as of August 31, according to the TOI report. Ola’s shares were being valued at $162.5 a piece as against $311 in February, according to the filings.

This is not the first time that most valuable Indian start-ups have faced markdowns by mutual funds and the numbers keep on changing. In 2016, e-commerce giant Flipkart’s valuation was marked down to $5.56 billion by Morgan Stanley and Fidelity. But the company later saw its valuation jump to $21 billion when it got acquired in 2018 by US retailer Walmart for $16 billion.

Also, in 2017, Vanguard Group had slashed the valuation of its stake in Ola. It had marked down the value of its holding in Ola’s parent firm ANI Technologies by over 40 per cent. This had indicated a valuation of close to $3 billion. This was down from Ola's peak of $5 billion when it last raised $500 million in November 2015.

Chart: The Pecking Order

Valuation of top Indian unicorns without markdown ($ bn)

Paytm  16 

Byju’s  11.5 

Oyo  10 

Ola  6 

Swiggy 3.65 

Zomato 3.5 

ReNew Power 3

Zerodha 3 

Udaan 2.8

BigBasket  2.5

Billdesk  1.8 

Delhivery 1.6 

Unacademy 1.45