A mutual fund managed by Morgan Stanley has slashed value of its Flipkart shares by another 38.2%, pegging the valuation of India's most valuable Internet company at $5.54 billion in the most significant markdown till now.Morgan Stanley has marked the value of their Flipkart shares at $52.13 per share as of September 2016, as compared to $84.29 per share in June 2016 and down 63.4% from $142.24 per share as of June 2015, filings made by the fund show.This is the fourth consecutive markdown by Morgan Stanley, one of the bigger mutual fund investors in India's most valuable startup and its largest to date, after a 27% markdown in February this year.This effectively pegs Flipkart's valuation at $5.54 billion, compared to $9 billion in the previous quarter and $15.2 billion when it last raised capital in July 2015. Prior to this, Flipkart has also witnessed a series of markdowns from other mutual fund investors like T Rowe Price, Fidelity and Valic over the past year.This development comes at a time when Flipkart is looking to shore up capital to maintain its pole position in India against US rival Amazon that has significantly ramped up its Indian operations in terms of both product and investment. The Bengaluru-based e-tailer is said to be in talks with Walmart for an investment of upto $1 billion, a deal which could potentially help both the companies take on Amazon in India."(Markdowns are) a theoretical exercise by small investors. From our perspective, valuation is when we raise money. From our perspective, valuation is when we raise money. When we raise money, our value will be clear in the market" Flipkart CEO Binny Bansal had told ET in an earlier interview. We've written to Flipkart for a comment and will update once we hear back.That said, India's largest Internet companies have struggled to raise capital at their existing valuations in a tough fundraising environment this year, after two years of hyper growth fuelled by a funding boom. ET reported on Friday that India’s largest ride-hailing app Ola is set to accept fresh funding at a lower valuation to fend off rival Uber The fundraising will be led by existing investor Japan's SoftBank and the company is expected to be valued at anywhere between $3 billion and $4 billion, in what will likely be first ever 'down round' for an Indian Internet Unicorn, five people aware of the developments had previously told ET.