Flipkart May Sell ₹700 Crore Stake in Shadowfax; Block Deal Preparations Intensify
Walmart-backed e-commerce company Flipkart is preparing to sell a significant portion of its stake in the logistics firm Shadowfax Technologies. According to Moneycontrol, the deal could be valued between ₹700 crore and ₹750 crore. It is expected that this block deal will be executed after the six-month lock-in period expires at the end of July. Through this transaction, Flipkart could reduce its stake in the company to approximately 2 percent.
Preparing to Reduce Stake for the Second Time
Flipkart invested in Shadowfax in 2019 and continued to back the company in subsequent funding rounds. The e-commerce giant had previously sold a portion of its stake via an Offer for Sale (OFS) during the IPO. At that time, the company raised around ₹400 crore against an initial investment of approximately ₹140 crore, effectively realizing a return of more than double its initial outlay.
Following the IPO, Flipkart’s stake dropped from approximately 14 percent to 8 percent. Regulatory documents indicate that the company currently holds about 4.26 crore shares. Plans are now underway to sell approximately 3.37 crore of these shares, a move expected to generate proceeds of ₹700–750 crore.
Stake to Drop to 2% After Block Deal
According to reports, this sale will be part of a larger block deal in which other early investors in Shadowfax may also offload their stakes. Investors such as Mirae, Eight Roads, Qualcomm, and TPG NewQuest are likely to participate. However, Flipkart will not be able to sell its entire holding due to the Securities and Exchange Board of India’s (SEBI) Minimum Promoter Contribution (MPC) regulations. Under these regulations, certain shares are subject to a mandatory lock-in period and cannot be sold before the stipulated time. The approximately 8.9 million shares held by Flipkart fall into this category; consequently, the company can currently only sell those shares for which the six-month lock-in period expires at the end of July.
Shadowfax is currently one of Flipkart’s key last-mile delivery partners. The company plays a crucial role in scaling up Flipkart’s delivery operations during festive seasons and periods of high demand. Additionally, Shadowfax provides third-party logistics services to various other e-commerce and hyperlocal companies.
Experts believe that in recent months, Flipkart has been actively pursuing a strategy to book profits from its investment portfolio. The company has previously raised thousands of crores of rupees through various investments. Against this backdrop, the potential sale of its stake in Shadowfax is viewed as a significant move in the company’s capital management strategy.
