Domestic e-commerce major Flipkart, which is reportedly preparing to issue an initial public offering (IPO), has confirmed its valuation at $15.2 billion (Rs 98,800 crore).

The valuation is based on funds worth about $700 million raised by the online retailer in its last round of funding, Business Standard reported.

On the other hand, valuation of Flipkart's rival Snapdeal is pegged at $5 billion in its recent round of funding ($500 million) from Alibaba and Foxconn.

Vinod Khosla, one of the co-founders of Sun Microsystems who is also a prominent investor, last week said that 85% of Indian online retailers, including Flipkart and Snapdeal, are "overvalued".

"If you ask me Flipkart, Snapdeal and other e-commerce start-ups are overvalued," Khosla told.

Valuation of e-commerce firms, which saw an exponential rise in recent years, is arrived by taking into account gross merchandise volume (GMV) of goods sold by them.

Flipkart's GMV was estimated at $4 billion in the last fiscal year ending March 2015 and the company plans to increase it to $10-12 billion by the end of this current fiscal year.

Indian e-commerce firms have come under severe criticism from various quarters for their unrealistic valuations.

During the March-June period this year, investors have pumped in $2.33 billion in Indian startups as against $844 million during the same period last year, a data from CB Insights showed.

Domestic Internet startups have been using unconventional terms to show higher growth numbers in a bid to attract more investments, but many warn such practices are leading to a bubble situation that would burst soon.

By following a discounting strategy, the players in the online market have witnessed a manifold increase in their customer base, but never posted profits since the beginning.