Q6.

Valuation of Myntra
$/transaction
GMV
COGS
Net Revenue
Costs
Operations
Logistics
Sales
Infrastructure
Net profit

FlipKar
t
146.11
116.89
29.22

Myntra
21.92
8.77
13.15

FlipMyn
82.57
49.16
33.41

4.68
14.61
6.90
9.17
-6.14

2.10
3.29
17.36
0.00
-9.60

5.35
8.26
6.90
9.17
3.74

Net gain / transaction to Flipkart = $ 3.74 (- $ 6.14) = $9.88

No. of transactions /yr. post merger
Earning / year

mill $

= 10.0375 million / yr
= 99.10889

WACC= 30%
Value of Myntra to Flipkart
WACC=30%

1
2
3
4
5
6
7
8
9
10
Total $
Total Rs cr.

DCF $
99108892
.22
76237609
.4
58644314
.93
45111011
.48
34700778
.06
26692906
.2
20533004
.77
15794619
.05
12149706
.96
9345928.
435
3983187
71.5
2389.91
2629

1.0
1.30
1.69
2.20
2.86
3.71
4.83
6.27
8.16
10.60

The WACC value is high but considering the following it appears reasonable

Myntra is in fashion business so industry risk is high

Myntra is a start up so firm level risk is very high
There is no debt

So the valuation of $ 350 million/ Rs 2000 cr is reasonable .