BlackBuck IPO: Peak XV, VEF To Book Losses On Partial Exits

As BlackBuck moves toward its public listing, the returns for its shareholders present a mixed bag. While early investors like Flipkart and Accel are cashing in with impressive gains, others such as Peak XV Partners (formerly Sequoia Capital) and Swedish investment firm VEF AB will book losses on their partial stake sales.  

Peak XV Partners, which first invested in the logistics unicorn in the Series D round, held a 2.14% stake (34.94 Lakh shares) in BlackBuck ahead of the IPO. It acquired these shares at an average cost of INR 308.98 each.

In the offer-for-sale (OFS) component of the IPO, the VC firm is selling 11.26 Lakh shares. At the upper end of the price band of INR 259 to INR 273, Peak XV would pocket INR 30.7 Cr – a loss of 11.6% compared to the INR 34.8 Cr it spent to acquire these shares.

After the IPO, Peak XV will continue to hold 23.68 Lakh shares of BlackBuck. 

Similarly, VEF AB held a 0.95% equity stake in BlackBuck (15.45 Lakh shares), which it acquired at an average cost of INR 481.84 per share.

However, it is selling 6.18 Lakh shares at a 43% loss in the OFS. The investment firm would sell the shares for INR 16.87 Cr at the upper end of the price band against the INR 29.76 Cr it invested to acquire these shares.

Following the IPO, VEF AB will continue to hold 9.27 Lakh shares, hoping for value recovery in the future. 

It is pertinent to note that BlackBuck cut its IPO valuation to INR 4,800 Cr from its peak valuation of INR 7,400 Cr in 2021.

The company’s IPO, which comprised a fresh issue of INR 550 Cr and an OFS of up to 2.16 Cr shares, received a muted response compared to the IPOs of some of the other new-age tech companies this year. Its public issue was subscribed 1.86 times.

Meanwhile, BlackBuck’s early investors, Flipkart and Accel, are capitalising on their long-term bets. Flipkart, through Quickroutes International, held a 13.2% stake (2.1 Cr shares) in the company. It is selling 55.3 Lakh shares for INR 151.1 Cr at the upper end of the price band, earning 5.24X returns on its initial investment of INR 28.8 Cr. 

Accel, with a 14.31% stake (2.3 Cr shares), is offloading 43.1 Lakh shares for INR 117.6 Cr, reaping 4.3X returns on its acquisition cost of INR 62.71 per share at a total investment of INR 144.23 Cr. 

Among other investors, Tiger Global is set to make 3.95X returns by selling 13.69 Lakh shares via the OFS. Newer backers such as Sands Capital and International Finance Corporation (IFC) will rake in modest profits, with gains of 2.1X and 1.4X, respectively, on their investments in BlackBuck.