Go Fashion stock in focus as Sequoia Capital may sell shares via block deal today

Shares of Go Fashion could see heavy volumes on Monday morning amid reports Venture capital firm Sequoia Capital would sell its entire 10.18 per cent stake in the parent of Indian clothing brand Go Colors through a block deal on Monday.

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

For the fresh stake sale, the floor price has been set at Rs 1,135 per share, a 5 per cent discount to Friday's closing price of Rs 1,194. The total size of the block deal will be Rs 625 crore, CNBC TV18 reported. JM Financial is reportedly the sole broker for the deal.

The move has come days after Sequoia Capital decided to split its businesses in China, India and Southeast Asia operations into two independent firms, which will be run without any involvement of Sequoia going forward.

Sequoia Capital held nearly 55 lakh Go Fashion shares accounting for 10.18 per cent stake in Go Fashion as of March 31, 2023. Shares of Go Fashion have jumped 8.4 per cent in the last one month. They are up 21.2 per cent in the last one year.

Go Fashion reported a 20 per cent rise in net profit at Rs 15 crore for the March quarter compared with Rs 12 crore in the year-ago quarter. The company’s total income for the quarter rose 34 per cent to Rs 160 crore compared with Rs 119 crore in the corresponding period of last year.

Sequoia’s China firm would be named Hongshan in English. India and Southeast Asia will be renamed as Peak XV, which will manage more than 400 portfolio companies and assets of $9.2 billion.

Sequoia raised $2.8 billion last year to invest in Indian and Southeast Asian startups, but the majority $2.5 billion remaining will be invested by Peak XV, which is now India's biggest venture capital firm being run by Sequoia's former managing directors in the region.