Source | https://economictimes.indiatimes.com : By Madhav Chanchani
BENGALURU: New York-based Tiger Global Management is set to cash in about $1 billion from its early bets on Ola and Flipkart by selling part of its shareholdings to Japan’s Soft-Bank, said two people familiar with the development.
The share sales by Tiger Global, the industry’s most prolific investor, signals increasing liquidity available in India’s mostvalued Internet firms as strategic investors SoftBank and China’s Tencent are keen on playing a bigger role in them. This, in a market where investment exits have been hard to come by.
The share sales in Flipkart and Ola will take the total realisations for Tiger Global, which has invested $2 billion over a decade in India, to nearly $1.5 billion. Led by reclusive Lee Fixel, Tiger Global is expected to earn about three times its investment in Flipkart and about five times the money it put into Ola.
While Tiger Global is expected to sell shares worth $600-700 million in Flipkart through a buyback, in Ola it will sell about half of its 15% stake, which is worth $600 million at the company’s current valuation, according to the two people mentioned earlier. SoftBank is expected to own about one-third of Ola and 20% in Flipkart after these deals.
Tiger’s remaining shares in these firms are valued at a combined $1.5-2 billion. Both the deals, like any private market secondary sale of shares, are happening at a discount to the existing valuations of these companies. “While the secondary sale by institutional shareholders in Flipkart is happening at a 30% discount, in Ola it is much lower at 10%,” said one of the persons familiar with the developments. Tiger Global did not reply to an email query on the stake sales. An email query to Ola remained unanswered as of press time. Flipkart and Ola compete with USbased Amazon and Uber, respectively.