MUMBAI, India — Indian e-commerce company Flipkart Pvt., one of Asia's most valuable startups, had its valuation slashed by a Morgan Stanley fund amid concerns of a shakeout among venture-backed companies.

Morgan Stanley Institutional Fund Trust valued its 566,827 shares in Flipkart at $58.9 million as of Dec. 31, down from $80.6 million in June, according to a filing with the U.S. Securities & Exchange Commission filing. Morgan Stanley didn’t explain the reasons for the markdown in the filing.

The seven year-old Flipkart was started by two former Amazon.com Inc. engineers in their apartment and has grown to become India’s biggest online seller of everything from apparel to smartphones. In its most recent funding round, the e-retailer was valued at more than $15 billion, according to Bank of America Merrill Lynch. Among its biggest investors are New York’s Tiger Global Management LLC and South Africa’s Naspers Ltd.

Flipkart, Amazon and SoftBank Group Corp.-backed Snapdeal.com are locked in a three-way battle for dominance in a market projected to be worth $220 billion by 2025. The three companies have resorted to spending heavily on advertising and deep discounting in their fight to win customers. Losses at the three companies in the year ended March is at least 50 billion rupees ($729 million), Kotak Institutional Equities said in a Feb. 5 report.

By Vrishti Beniwal and Adi Narayan; editors: Robert Fenner and Dave McCombs.