According to a report on Sunday, venture capital firm Sequoia Capital will sell all of its 10.18% ownership in Go Fashion, the parent company of the Indian clothing line Go Colors, through a block deal on Monday.
The floor price for the stake sale will be Rs 1,135, which represents a 5% drop from the share’s closing price on Friday of Rs 1,194. According to CNBC TV18, the block deal will be for a total of Rs 625 crore. JM Financial is the only broker for the transaction.
As of March 31, 2023, Sequoia Capital held almost 55 lakh shares, or 10.18% of Go Fashion, according to the shareholding pattern disclosed to the BSE.
The action was taken just days after Sequoia Capital announced that it was dividing its operations in China, India, and Southeast Asia into two independent firms that will operate going ahead without any assistance from Sequoia.
The Chinese company will be called Hongshan in English, and Peak XV will oversee Sequoia’s former $9.2 billion in assets and more than 400 portfolio firms in India and Southeast Asia.
Sequoia has over the years invested in some of the top businesses in India, such as the food delivery company Zomato and the payments company Pine Labs.
Sequoia also raised $2.8 billion last year to invest in startups in India and Southeast Asia, but Peak XV, currently India’s largest venture capital company and headed by Sequoia’s former managing directors in the country, will invest the majority of the $2.5 billion left over.
The creation of the new firm comes at a time when many businesses in India are having difficulty finding funding, which has caused layoffs as investors adjust to stretched valuations.
Up until last year, Sequoia Capital owned a 13.8% stake in Go Fashion. But in December 2022, it started a block transaction to sell a 3.7% interest for Rs 228 crore.
For the quarter that ended in March 2023, Go Fashion had a 20% increase in net profit to Rs 15 crore from Rs 12 crore in the corresponding time the previous year.
In comparison to the same period in the prior fiscal year, the company’s overall revenue for the quarter increased by 34% to Rs 160 crore from Rs 119 crore.
