India’s Shadowfax retreats from listing, as customer concentration scares off investors

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

Shares fell nearly 9% from their offer price of INR 124 to INR 112.60 on Wednesday, valuing the Bengaluru-based logistics company at about INR 64.7 billion (about US$706.58 million) on debut, roughly in line with its last private valuation of nearly INR 60 billion (about US$655.01 million) in early 2025. Scope Ranging between INR 118-124 per share, a new issue was combined with an offer for sale by the existing shareholders and was subscribed. Almost three times more.

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

Shadowfax’s listing comes as India’s e-commerce and express commerce sectors continue to expand, driven by rising internet penetration, urbanization and demand for faster deliveries. Platforms that offer same-day or express delivery services are increasingly relying on third-party logistics providers to expand nationally, putting companies like Shadowfax at the center of the nation’s consumer internet supply chain.

The offering includes shares sold by some early backers and institutions, 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 post the listing.

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

In the six months ended September 2025, Shadowfax reported revenue from operations of INR 18.06 billion (about US$197.12 million), up 68% from the same period a year earlier, according to its prospectus. The company’s profits more than doubled year-on-year to INR 210.37 million (about US$2.30 million), reflecting higher delivery volumes, although profits remain closely tied to demand from a small group of large platform customers.

Shadowfax plans to use the proceeds from the new issue to fund capital expenditures for its network infrastructure, pay rental costs for new first- and last-mile centers and sortation centers, and meet branding, marketing and communications expenses, the prospectus said. A portion of the proceeds will also be retained for inorganic acquisitions and general corporate purposes.

The company currently operates approximately 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. I mentioned Revenue was around INR 89.3 billion (about US$974.84 million) in the year ended March 2025, with year-on-year growth in the low teens, underscoring the contrast with Shadowfax’s faster expansion.