India’s Shadowfax slips on listing as client concentration unsettles investors

Shadowfax had a muted debut on the stock market, with its shares declining as investors digested concerns around the logistics company’s dependence on a small group of large e-commerce customers. The Bengaluru-based firm raised roughly ₹19.07 billion (about $208.24 million) through its initial public offering.

Shares ended the session about 9% below the issue price, sliding from ₹124 to ₹112.60 on Wednesday. The drop valued Shadowfax at approximately ₹64.7 billion (around $706.58 million), broadly in line with its most recent private valuation of nearly ₹60 billion (about $655.01 million) recorded earlier this year. The IPO, priced in a range of ₹118 to ₹124 per share, comprised a fresh issue alongside an offer-for-sale by existing shareholders, and was subscribed to nearly three times over.

Founded in 2015, Shadowfax operates as a third-party logistics provider, managing last-mile and intra-city deliveries for e-commerce marketplaces, quick-commerce services, and consumer internet companies across India. Its largest customers include Flipkart and Meesho in e-commerce, as well as quick-commerce and food delivery platforms such as Zepto and Zomato. Together, these clients account for roughly 74% of the company’s revenue, according to its prospectus. Shadowfax’s shareholder base includes Flipkart, TPG NewQuest, Qualcomm, and the World Bank-backed International Finance Corporation.

The listing comes at a time when India’s e-commerce and quick-commerce markets continue to expand, supported by rising internet usage, urbanisation, and growing demand for faster deliveries. Companies offering same-day or rapid fulfilmentincreasingly rely on third-party logistics providers to scale nationwide, making firms like Shadowfax a core part of the country’s consumer internet supply chain.

As part of the IPO, several early and institutional investors sold shares, including Flipkart, Eight Roads Ventures, Nokia Growth Partners, Qualcomm, and Mirae Asset. Founders Abhishek Bansal and Vaibhav Khandelwal did not participate in the offer-for-sale and will collectively retain around 20% ownership following the listing.

“We don’t see this IPO as a destination,” Shadowfax co-founder and CEO Abhishek Bansal said during the company’s listing 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.”

For the six months ended September 2025, Shadowfax reported revenue from operations of ₹18.06 billion (about $197.12 million), representing a 68% increase from the same period a year earlier, according to its prospectus. Profit more than doubled year over year to ₹210.37 million (around $2.30 million), driven by higher delivery volumes, though earnings remain closely linked to demand from a relatively concentrated group of large platform clients.

The company plans to use proceeds from the fresh issue to invest in network infrastructure, cover lease expenses for new first-mile, last-mile, and sorting facilities, and fund branding, marketing, and communication initiatives. Part of the funds will also be allocated toward potential inorganic acquisitions and general corporate purposes.

Shadowfax currently operates about 3.5 million square feet of logistics infrastructure spanning roughly 14,700 pin codes across India.

The IPO arrives more than three years after larger rival Delhivery went public in 2022. Delhivery reported revenue of around ₹89.3 billion (approximately $974.84 million) for the year ended March 2025, with growth in the low-teens, highlighting the contrast between its scale and Shadowfax’s faster pace of expansion.