Sequoia Capital to sell entire 10.18% stake in Go Fashion for Rs 625 cr: Report

Venture capital firm Sequoia Capital will sell its entire 10.18% stake in Go Fashion, the parent of Indian clothing brand Go Colors, through a block deal on Monday, said a report on Sunday.

The floor price for the stake sale will be Rs 1,135 per share, a discount of 5% as compared to the Friday closing price of Rs 1,194. The total size of the block deal will be Rs 625 crore, reported CNBC TV18. JM Financial is reportedly the sole broker for the deal.

As per the shareholding pattern shared with the BSE, Sequoia Capital held nearly 55 lakh shares accounting for 10.18% stake in Go Fashion as of March 31, 2023.

The move comes days after Sequoia Capital said it is splitting its businesses in China as well as India and Southeast Asia into two independent firms, which will be run without any involvement of Sequoia going forward.

The China firm will be named Hongshan in English, while in India and Southeast Asia, Peak XV will manage more than 400 portfolio companies and assets of $9.2 billion, which Sequoia previously managed.

Over years, Sequoia invested in some of India's biggest startups, including food delivery firm Zomato and payments firm Pine Labs.

Sequoia also 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.

The new entity formation comes just as many startups in India are struggling, hit by a funding squeeze that has led to layoffs as investors reckon with stretched valuations.

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

Go Fashion witnessed a 20% rise in net profit to Rs 15 crore for the quarter ended March 2023, as against Rs 12 crore in the year-ago period.

The company’s total income for the quarter rose by 34% to Rs 160 crore, as against Rs 119 crore reported in the corresponding period of the previous fiscal year.

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