India’s Shadowfax stumbles on debut, with investor concerns over reliance on key clients

Shadowfax Faces Challenging Stock Market Debut

Shadowfax experienced a difficult first day on the stock exchange, as its share price dropped amid investor concerns over the company’s significant dependence on a few major e-commerce partners. The logistics provider secured approximately ₹19.07 billion (about $208.24 million) through its initial public offering.

On Wednesday, shares opened at ₹124 but slipped nearly 9% to ₹112.60, giving the Bengaluru-based company a market capitalization of roughly ₹64.7 billion (around $706.58 million). This valuation is close to its last private funding round, which valued the company at nearly ₹60 billion (about $655.01 million) in early 2025. The IPO, priced between ₹118 and ₹124 per share, included both new shares and a sale of existing holdings, and was almost three times oversubscribed.

Founded in 2015, Shadowfax specializes in third-party logistics, providing last-mile and intra-city delivery services for e-commerce, quick-commerce, and consumer internet companies throughout India. Its largest customers include Flipkart, Meesho, Zepto, and Zomato, which together contribute about 74% of the company’s total revenue, according to its IPO documents. Major investors in Shadowfax include Flipkart, TPG NewQuest, Qualcomm, and the International Finance Corporation, which is backed by the World Bank.

The company’s public listing comes at a time when India’s e-commerce and quick-commerce industries are rapidly growing, fueled by increasing internet access, urbanization, and a rising demand for speedy deliveries. As more platforms seek to offer same-day or rapid delivery, they increasingly rely on third-party logistics providers like Shadowfax, placing the company at the heart of India’s consumer supply chain.

The IPO featured share sales from early and institutional investors such as Flipkart, Eight Roads Ventures, Nokia Growth Partners, Qualcomm, and Mirae Asset. However, co-founders Abhishek Bansal and Vaibhav Khandelwal did not sell any shares and will retain a combined 20% stake in the company after the listing.

“We don’t view this IPO as the final goal,” said Abhishek Bansal, co-founder and CEO of Shadowfax, during the listing ceremony in Mumbai. “Our vision extends far beyond the next quarter—we’re building for the long term. Today isn’t just about ringing a bell; it’s about embracing new opportunities.”

For the six months ending September 2025, Shadowfax reported operational revenue of ₹18.06 billion (approximately $197.12 million), a 68% increase compared to the same period the previous year. Net profit more than doubled to ₹210.37 million (about $2.30 million), driven by higher delivery volumes. However, the company’s earnings remain closely linked to demand from its largest clients.

Future Plans and Industry Context

According to its prospectus, Shadowfax intends to allocate funds from the new share issue toward expanding its logistics network, covering lease expenses for new facilities, and supporting branding and marketing initiatives. Some proceeds are also earmarked for acquisitions and general corporate needs.

Currently, the company manages around 3.5 million square feet of logistics space, serving 14,700 pin codes across India.

Shadowfax’s IPO follows more than three years after its larger competitor, Delhivery, went public in 2022. In the year ending March 2025, Delhivery reported revenue of about ₹89.3 billion (roughly $974.84 million), with annual growth in the low teens, highlighting the faster pace of Shadowfax’s expansion.