Go Fashion tanks 5% after large deal, Sequoia Capital likely seller

Shares of Go Fashion, the parent entity of Indian clothing brand Go Colors, tanked 5 percent in early trade on June 12 after around 62 lakh shares, or an 11.5 percent stake, changed hands at Rs 1,136 apiece, a discount of nearly 5 percent from June 9 closing price. The deal value was around Rs 705.5 crore.

Even though Moneycontrol could not immediately identify the sellers and buyers, CNBC-TV18 earlier reported that Sequoia Capital was looking to sell its stake in the company.

At 9.19 am, shares of Go Fashion India were trading at Rs 1,135.95, down 4.91 percent on the National Stock Exchange.

CNBC-TV18 reported on June 11 that Sequoia Capital was looking to sell up to 10.18 percent stake in Go Fashion. The stake sale was likely to be pegged at a floor price of Rs 1,135 a share, taking the deal value to Rs 624 crore, the report, citing sources, said.

As per the retail company’s shareholding data at the end of the March quarter, Sequoia Capital held a 10.18 stake. If Sequoia Capital is indeed the seller, then it has offloaded its entire stake in Go Fashion.

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In December 2022, Sequoia Capital reduced its 13.8 percent stake in Go Fashion to 10.18 percent after offloading 3.7 percent shares through a Rs 228-crore block deal.

Sequoia Capital restructuring

The decision to exit the company has come five days after Sequoia Capital’s announced restructuring of business into three entities. Each entity will focus on the markets of the United States, China and India and Southeast Asia.

This strategic move was deemed necessary as the firm’s portfolio companies in these regions have grown significantly, leading to potential conflicts.

The division responsible for handling investments in India and Southeast Asia has now been rebranded as Peak XV Partners. It will operate as an independent entity, managing a total of $9.2 billion across 13 funds.

Peak XV Partners will continue to invest in startups, utilising the remaining $2.5 billion of uninvested capital from Sequoia’s overall fund, the company has said.

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