Bengaluru, Feb 26: Flipkart Group saw its total revenues increase by a faster pace of over 50% to Rs 30,164 crore in the financial year ending March 2018.
This came even as losses increased over five-fold, primarily on account of finance costs, to Rs 46,895 crore, according to filings of its Singapore parent sourced from data intelligence platform Paper.vc.
Without taking into account finance costs, which was a derivative expense on account of the down-round fund-raise by the company in mid-2017, losses increased by 75% to Rs 5,964 crore. Finance costs — mostly under “fair value loss on derivative financial instruments” — increased nearly tenfold to Rs 40,937 crore in FY18 from Rs 4,309 crore in FY17.
“It (finance cost) is not an actual loss. For instance, they have not sold the shares and they continue to hold that. But in terms of real marked-to-market, the actual value has gone down due to certain actions, which resulted in this loss. For that, they have to account the same and downgraded the valuation,” said Ajay Agarwal, co-founder of Triage Advisors, who previously worked with KPMG.
The financials are the last results of Flipkart Group as an independent company, and since then US-based retail giant Walmart acquired 77% stake for $16 billion in August 2018. Co-founders — Sachin and Binny Bansal — have also moved out of the day-to-day operations of the company.
Major areas where the Flipkart Group increased spending include employee costs, advertising expenses and logistics costs as it had got funding during the year from the likes of Japan’s SoftBank and China’s Tencent. Amazon’s main India unit — Amazon Seller Services — had reported a 30% increase in losses to Rs 6,287 crore in FY18.