Eight Roads, Flipkart, IMM offer Shadowfax shares worth ₹1,048 crore as lock-in ends
Fidelity-backed Eight Roads Ventures, Walmart-owned Flipkart Internet and IMM India Fund are proposing to sell a combined 9.08% stake in Shadowfax Technologies Ltd through block deals on Friday as post-listing lock-up periods expire, according to a term sheet reviewed by Mint.
According to the term sheet, sellers offer shares worth 100,000 TL. ₹1,048 crore. Base price has been determined ₹197 per share represents a 9.87% discount to the stock’s closing price ₹218.58 on July 23. An upper size option for the offering has not yet been determined.
Eight Roads Investments Mauritius II Ltd (the entity to which Eight roads sold shares) currently holds 55.57 million shares, representing approximately 9.50% of Shadowfax’s total outstanding shares. Flipkart holds 42.64 million shares or roughly 7.29 per cent, while IMM India holds less than 1 per cent. Eight Roads became the first institutional investor to join Shadowfax in 2015. Another major investor, Flipkart, is also one of Shadowfax’s biggest customers.
Lockdown period ends
The share sale coincides with the end of a six-month lock-up period for major pre-IPO investors and backers following the company’s IPO at the end of January. Consists of 49% of Shadowfax’s total shares at maturity (approximately valued) ₹6,300 crore) can be traded from Friday, July 23.
News outlet Moneycontrol was the first to report on July 13 that Flipkart would likely sell a stake worth a share. ₹700 crore on Shadowfax once the lock-in period ends. Responding to questions from the exchanges, Shadowfax stated that it was not aware of such negotiations mentioned in the report.
Both Eight Roads and Flipkart sold Shadowfax shares through an offer for sale in the company’s IPO. ₹124 are listed at: ₹113, 8% off. The stock price has nearly doubled since then.
Kotak Securities Ltd and Morgan Stanley India Co are acting as placement agents for Eight Roads Investments, while Kotak is also acting as placement agents on behalf of Flipkart and IMM India.
Shadowfax’s revenue is as follows: ₹1,237 crore, up 74% in March quarter ₹712 crore a year ago. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased almost 11 times ₹58 crore ₹5 crore in Q4FY25. The company made a profit ₹56 crore after watching one hour ₹10 crore loss in the previous year quarter. Shadowfax has yet to report June quarter earnings.
Before Shadowfax, eyewear retailer Lenskart Solutions Ltd had witnessed early backers offloading their holdings once their commitment period ended. Singapore’s sovereign wealth fund Temasek sells 2 percent stake in Lenskart ₹1,940 crore this month after Abu Dhabi’s sovereign wealth fund sold a 2.3% stake for a similar amount. On June 3, a SoftBank entity sold its 3.25% stake through a block deal. ₹2,873 crore.
