Walmart-backed e-commerce major Flipkart has initiated plans to divest a portion of its stake in logistics startup Shadowfax Technologies, with the transaction expected to be valued at around Rs 700–750 crore, according to sources familiar with the matter.
This marks Flipkart’s second dilution in Shadowfax and forms part of a broader monetisation strategy that has already generated over Rs 2,500 crore (approximately $265 million) through exits from investments such as BlackBuck and Aditya Birla Group companies. The move comes as the company continues to optimise its financial position, having reduced its monthly cash burn from nearly $40 million in recent months, while deferring external fundraising and delaying its IPO plans.
Sources indicated that the stake sale could take place as early as the end of July, coinciding with the expiry of a six-month lock-in period. The transaction is likely to be executed as part of a larger block deal, potentially at a 2–4 percent discount to the current market price.
Shadowfax shares were trading at Rs 227.95 on the BSE as of July 10, up 3.5 percent.
Flipkart, an early investor in Shadowfax since 2019, has consistently backed the company across funding rounds. The logistics startup remains a key last-mile delivery partner for Flipkart, particularly during peak demand periods when its in-house logistics network is stretched. Shadowfax also serves multiple enterprises reliant on third-party logistics solutions.
According to Shadowfax’s updated draft red herring prospectus (UDRHP), Flipkart previously held around 14 percent stake (approximately 74.9 million shares). Following partial dilution through the offer-for-sale (OFS) component during the IPO, its stake reduced to about 8 percent, or 42.6 million shares.
That earlier dilution fetched Flipkart roughly Rs 400 crore, delivering over two times returns on its initial investment of around Rs 140 crore.
In the proposed transaction, Flipkart is expected to sell nearly 33.7 million shares, equivalent to around a 6 percent stake, bringing its holding down to approximately 2 percent post-deal. The remaining 8.9 million shares will continue to be held as part of the minimum promoter contribution, in line with Securities and Exchange Board of India (SEBI) regulations.
These shares are subject to an 18-month lock-in period following listing, ensuring continued commitment from key stakeholders. Flipkart had contributed to this requirement alongside other early investors such as Mirae Asset, Eight Roads, Qualcomm and TPG NewQuest.
The upcoming block deal is also expected to see participation from several of these early backers, further signalling a phased exit strategy by initial investors.
source: MoneyControl
