Flipkart To Sell Stake Worth ₹750 Cr in Shadowfax Technologies Via Block Deal

Flipkart is preparing to divest a portion of its holding in logistics firm Shadowfax Technologies to raise ₹700-750 crore. The Walmart-owned e-commerce giant has reportedly initiated the process for this partial stake sale.

The divestment will likely occur through a broader block trade scheduled for late July 2026. This timing coincides with the expiration of a six-month lock-in restriction, Moneycontrol reported citing sources.

This transaction represents the second time Flipkart has trimmed its holding in the logistics firm. The move follows a string of recent divestments that generated more than ₹2,500 crore ($265mn) for the e-commerce giant. These funds came from exits of BlackBuck, Aditya Birla group firms and other portfolio assets.

Flipkart is yet to respond to Outlook Business' query on the matter.

The company, which has significantly reduced its monthly cash burn from around $40 million a few months ago, has increasingly turned to portfolio exits to unlock liquidity as it steers clear of external fundraising and defers its IPO plans.

Details of Block Deal

According to Moneycontrol, Flipkart may sell shares as early as the end of this month around when the six-month lock-in expiry ends as part of a larger block deal.

The transaction could be priced at a 2-4% markdown to the prevailing market rate, the report said.

Shadowfax's shares traded at ₹227.95 apiece, up 3.5% on the BSE on July 10.

Other early backers likely to participate in the block deal include Mirae, Eight Roads, Qualcomm and TPG NewQuest, as per the report.

Evolution of Partnership

Flipkart first invested in Shadowfax in 2019 and has backed the logistics startup in subsequent funding rounds.

The logistics startup manages crucial last-mile operations for Flipkart. It steps in to handle hyperlocal and online retail deliveries when Flipkart's own distribution network faces capacity constraints during peak shopping seasons. Additionally, the firm operates as the main courier service for multiple external brands that outsource their entire supply chain operations.

Prior to its stock market debut, the logistics firm filed updated draft listing documents with the SEBI. These filings showed the e-commerce major owned a 14% stake, representing nearly 74.9 million shares, as per Moneycontrol.

During the public listing, the Bengaluru-based firm divested a portion of its holding through the offer-for-sale window. This transaction reduced its ownership to approximately 8%, leaving it with 42.6 million shares, regulatory filings showed.

The initial public offering divestment yielded approximately ₹400 crore for Flipkart, regulatory documents indicated. This return represented more than double its original capital injection of about ₹140 crore.

Promoter Contribution Limits

The e-commerce firm plans to offload approximately 33.7 million shares, reducing its ownership by about 6%. This transaction will leave the company with a residual stake of roughly 2% in the logistics firm, the report said.

The remaining 8.9 million shares must stay with the e-commerce firm. These shares are locked under regulatory rules governing minimum promoter contributions.

SEBI requires a minimum stake to remain locked in after an IPO to ensure there is long-term 'skin in the game' and reassure public investors that key shareholders cannot exit immediately after listing. These shares are subject to a mandatory lock-in period — typically 18 months — during which they cannot be sold.

If the promoters themselves do not own enough shares to meet the requirement, eligible existing shareholders can contribute part of their holding without becoming promoters. Flipkart was one such contributor in Shadowfax alongside Mirae, Eight Roads and TPG NewQuest, filings showed.