Shadowfax denies knowledge of reported Flipkart stake sale plans
The company told NSE and BSE it has no knowledge of any negotiations or undisclosed information linked to the reported stake sale or recent share price movement.
Shadowfax Technologies has told the National Stock Exchange (NSE) and BSE that it is not aware of any negotiations related to the reported sale of Flipkart's stake in the company. The clarification came after the exchanges sought the company's response to a Moneycontrol report that claimed Walmart-backed Flipkart was planning to sell shares worth around ₹7 to 7.5 billion in the logistics company.
In its filing, Shadowfax said it was not aware of any negotiations referred to in the report. The company also said it was not aware of any undisclosed information that could explain the recent movement in the trading price of its shares.
Shadowfax further said that, as it was not aware of any such negotiations, it was unable to comment on whether the report was factually incorrect or otherwise.
Flipkart is planning to sell part of its stake in Shadowfax in a transaction worth around ₹7 billion. The sale is expected to take place around the end of July after the expiry of the six-month lock-in period and may be part of a larger block deal involving other early investors. The deal could be executed at a discount of 2-4% to the current market price.
This would be Flipkart's second stake sale in Shadowfax. Flipkart first invested in the company in 2019 and has participated in subsequent funding rounds. Shadowfax is one of Flipkart's key last-mile delivery partners, handling hyperlocal and e-commerce shipments, particularly during periods of high demand.
According to regulatory filings, Flipkart held around 14%, or 74.9 million shares, in Shadowfax before the company's initial public offering. After selling shares through the offer-for-sale component of the IPO, its holding fell to around 8%, or 42.6 million shares.
Flipkart is expected to sell around 33.7 million shares, equivalent to about a 6 percent stake, which could generate liquidity of around ₹7 billion. If the transaction goes through, Flipkart would retain around a 2% stake in Shadowfax.
However, Flipkart cannot sell its entire holding. Around 8.9 million shares form part of the minimum promoter contribution and remain under a mandatory 18-month lock-in period under SEBI regulations. These shares cannot be sold until the lock-in period ends.
