India’s Shadowfax slips on listing, as client concentration spooks investors

Shadowfax stumbled in its market debut, with shares falling as investors weighed concerns about the logistics firm’s heavy reliance on a handful of large e-commerce clients. The company raised about ₹19.07 billion (about $208.24 million) in its initial public offering.

The shares fell about 9% from the offer price of ₹124 to ₹112.60 on Wednesday, valuing the Bengaluru-based logistics firm at roughly ₹64.7 billion (about $706.58 million) on debut, roughly matching its last private valuation of close to ₹60 billion (roughly $655.01 million) in early 2025. The offering, priced in a band of ₹118–124 per share, combined a fresh issue with an offer-for-sale by existing shareholders and was subscribed nearly three times over.

Founded in 2015, Shadowfax operates as a third-party logistics provider, handling last-mile and intra-city deliveries for e-commerce marketplaces, quick-commerce platforms and consumer internet companies across India. The company counts e-commerce players including Flipkart and Meesho, as well as quick-commerce and food delivery platforms Zepto and Zomato, among its largest clients, which together account for about 74% of its revenue, according to its prospectus. Its key shareholders include Flipkart, TPG NewQuest, Qualcomm, and the World Bank-backed International Finance Corporation.

Shadowfax’s listing comes as the e-commerce and quick-commerce sectors continue to expand in India, driven by rising internet penetration, urbanization, and demand for faster deliveries. Platforms offering same-day or rapid fulfillment have increasingly leaned on third-party logistics providers to scale nationally, placing companies like Shadowfax at the centre of the country’s consumer internet supply chain.

The offering includes shares sold by some early and institutional backers, including Flipkart, Eight Roads Ventures, Nokia Growth Partners, Qualcomm, and Mirae Asset. Founders Abhishek Bansal and Vaibhav Khandelwal are not participating in the offer-for-sale and will together retain about 20% of the company after listing.

“We don’t see this IPO as a destination,” said Bansal, Shadowfax’s co-founder and CEO, during its IPO launch ceremony in Mumbai. “We are not building this for the next quarter. We are building this for the next century. Today, we don’t ring a bell. We are waking up to a new set of possibilities.”

In the six months ended September 2025, Shadowfax reported revenue from operations of ₹18.06 billion (about $197.12 million), up 68% from the same period a year earlier, per its prospectus. The company’s profit more than doubled year over year to ₹210.37 million (around $2.30 million), reflecting higher delivery volumes, though earnings remain closely tied to demand from a small group of large platform clients.

Shadowfax plans to use proceeds from the fresh issue to fund capital expenditure for its network infrastructure, pay lease costs for new first-mile, last-mile and sorting centres, and meet branding, marketing and communication expenses, its prospectus said. A portion of the proceeds will also be kept for inorganic acquisitions and general corporate purposes.

The company currently operates around 3.5 million square feet of logistics infrastructure across 14,700 pin codes nationwide.

Shadowfax’s IPO comes more than three years after its larger rival, Delhivery, went public in 2022. Delhivery reported revenue of about ₹89.3 billion (around $974.84 million) in the year ended March 2025, with year-over-year growth in the low teens, underscoring the contrast with Shadowfax’s faster expansion.