Melbourne Cup runner Araldo has been put down after injuring himself when he was spooked by a racegoer waving a flag following the race.

Racing Victoria confirmed Araldo had been "humanely euthanised as a result of injuries sustained in a freak accident".

Earlier, Cup favourite Admire Rakti collapsed and died after finishing last.

The Mike Moroney-trained Araldo was returning to scale after running a fast-finishing seventh behind winner Protectionist when he was startled by a flag being waved in the crowd. He kicked out and struck a fence near a rose bed, injuring his right hind leg.

"He got spooked by a big flag after the Cup and ran away from it," Moroney said.

"It is so sad for the staff and the owners. He was such a lovely horse and he ran terrific in the Melbourne Cup.

"It was a freak accident. They run the Melbourne Cup for 154 years and nothing like that has happened."

Racing Victoria's Head of Veterinary and Equine Welfare Brian Stewart said the horse kicked out and fractured a pastern bone in its hind leg on the fence bordering the path.

"The horse received immediate veterinary care and was transported to the University of Melbourne Veterinary Hospital, however, sadly the fracture in its pastern was not repairable," Dr Stewart said.

"The owners made the decision to humanely euthanise Araldo in the best interests of the horse.

"Our sympathies are extended at this time to trainer Mike Moroney, his staff and the owners who are extremely saddened by the loss of their horse in such tragic circumstances."

The seven-year-old, a $21 chance ridden by Dwayne Dunn, had run on from back in the field to finish seventh, collecting $125,000 for his owners.

He finished in similar fashion last month to run fifth in the Caulfield Cup behind Admire Rakti.