Sequoia Capital to divest up to 10.18% in Go Fashion through block deal

Go Fashion sells women’s bottom-wear and kids' apparel under the Go Colors brand (File image)

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Venture capital firm Sequoia Capital will sell up to 10.18 percent stake which it holds in Go Fashion, the parent entity of Indian clothing brand Go Colors, via a block deal, CNBC TV-18 reported, citing sources.

The floor price for the stake sale will be Rs 1,135 per share, the persons privy to the development told the news channel. This would mark a discount of 5 percent as compared to the last closing price. The total size of the block deal will be Rs 624 crore, the report added.

As per the shareholding pattern shared with the BSE, Sequoia Capital, via its India investment arm, held a total of 54,98,875 shares accounting for 10.18 percent stake in Go Fashion as of March 31, 2023.

The decision to offload the stake, as reported by CNBC TV-18, has been taken five days after Sequoia Capital announced it was splitting its business into three entities, catering to the the markets of the United States, China, and India & Southeast Asia separately. The firm said the move was necessary as its portfolio companies in these geographies have grown large enough to overlap and create territorial conflicts.

The India and Southeast Asia arm has been rebranded as Peak XV Partners and will now operate as a fully independent firm. It will continue to manage $9.2 billion across 13 funds and invest in startups using the $2.5 billion of uninvested capital that remains in Sequoia's corpus.

Sequoia Capital, till last year, held a 13.8 percent stake in Go Fashion. It had, however, launched a block deal in December 2022 to sell a 3.7 percent stake for Rs 228 crore.

Go Fashion, in the quarter ending March 2023, recorded a net profit of Rs 15 crore, which was 20 percent higher as against the year-ago period. The company’s total income in Q4FY23 jumped by 34 percent to Rs 160 crore.

In the last trading session on June 9, Go Fashion's stock traded in the red, with the scrip settling at Rs 1,195.85 apiece on the BSE. This was nearly three percent lower as against the previous day.