New Delhi: Walmart-backed e-commerce company Flipkart is preparing to sell a significant part of its stake in logistics firm Shadowfax Technologies through a block deal worth Rs 700–750 crore, according to a Moneycontrol report.
The transaction is expected to take place after the six-month lock-in period ends later this month. Once completed, Flipkart's stake in Shadowfax could fall to around 2 percent from the current 8 percent.
Second Stake Reduction
Flipkart first invested in Shadowfax in 2019 and continued to support the company in later funding rounds.
During Shadowfax's initial public offering (IPO), Flipkart had already sold part of its holding through the Offer for Sale (OFS) route. The company reportedly raised around Rs 400 crore from that sale against a total investment of nearly Rs 140 crore, earning more than double its original investment.
Following the IPO, Flipkart's shareholding in Shadowfax declined from around 14 percent to 8 percent.
Details of the Deal
Regulatory filings show that Flipkart currently owns about 4.26 crore shares in Shadowfax.
The company is now planning to sell nearly 3.37 crore shares, which could fetch Rs 700–750 crore. The sale is expected to be carried out through a large block deal, with several early investors also likely to participate.
These investors may include Mirae Asset, Eight Roads Ventures, Qualcomm and TPG Newquest.
Lock-in Restrictions
Flipkart will not be able to sell its entire remaining stake immediately because of the Securities and Exchange Board of India (SEBI)'s Minimum Promoter Contribution (MPC) rules.
Around 89 lakh shares held by Flipkart remain under the mandatory lock-in period. As a result, only those shares whose six-month lock-in expires at the end of July can be sold in the proposed transaction.
Strategic Move
Shadowfax is one of Flipkart's key last-mile delivery partners and plays an important role during festive seasons and periods of high demand. The company also provides third-party logistics services to several other e-commerce and hyperlocal businesses.
Market experts believe Flipkart has been actively monetising its investment portfolio in recent months. The proposed sale of its Shadowfax stake is seen as another important step in the company's capital management strategy.
