Shadowfax Technologies Ltd. shares dropped nearly 5% on Friday after reports of a large block deal involving three of its existing investors weighed on the stock.
Flipkart, Eight Roads Investments and IMM India Fund were looking to pare their holdings in the logistics company through a transaction valued at around Rs 1,048 crore, people familiar with the development told NDTV Profit earlier.
The proposed deal covers nearly 9.1% of Shadowfax's outstanding equity. Shares are expected to be offered at a floor price of Rs 197 apiece, about 10% below the prevailing market price, the people said.
The stock is currently trading at Rs 210.1 apiece on NSE, down from its previous close at Rs 218.58.
Kotak Securities and Morgan Stanley are handling the transaction.
Also Read: Shadowfax Shares In Focus As Flipkart, Eight Roads, IMM India Fund Plan Rs 1,048 Crore Block Deal
Shadowfax Lock-In Expiry Opens Up Shares
The block deal comes shortly after the lock-in period on a significant portion of Shadowfax's shareholding came to an end.
With the one-year lock-in expiring on July 22, nearly 49% of the company's equity became available for trading. Private equity and venture capital investors collectively account for around 36.8% of the shareholding that is now free from restrictions.
Among the key investors, Flipkart held a 7.3% stake in Shadowfax, with around 3.4 crore shares becoming eligible for sale.
Eight Roads Investments owned 9.5% of the company and can now sell roughly 4.7 crore shares. IMM India Fund is another shareholder whose stake is no longer subject to the lock-in restriction.
A further 22% of Shadowfax's equity, which includes promoter holdings, will continue to remain locked in until July 22, 2027.
Shadowfax Shares' Rally
The latest selling pressure comes after a strong run for Shadowfax shares since their stock market debut. The logistics company's shares had listed at Rs 113, an 8.9% discount to the IPO price of Rs 124, and since then the stock rallied over 90.9%.
However, in the last one month, the stock declined over 8.18%, including the recent fall.
Investors will now track the execution of the block deal and whether the expiry of the lock-in period leads to further stake sales by institutional shareholders.
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