Why PE investors bet big on Flipkart even as mutual funds were sceptic

Private investors look at future growth potential; MFs value a firm based on current business

Flipkart’s latest funding round of $1.4 billion at a valuation of $11.6 billion shows that private investors look at growth opportunities differently from mutual funds, which value a company based on its business as against its future potential.

Mutual funds such as Morgan Stanley, Fidelity, T Rowe Price and Valic had marked down their investments in Flipkart last year, getting caught in a global trend that saw internet and technology companies lose their notional value.  These firms had to publicly disclose their perception of the true value of shares held by them in private firms.
Interestingly, while large investors