Shadowfax Technologies coming with IPO to raise Rs 2004.24 crore

Shadowfax Technologies

• Shadowfax Technologies is coming out with a 100% book building; initial public offering (IPO) of 16,16,32,964 shares of Rs 10 each in a price band Rs 118-124 per equity share. 
• Not more than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.
• The issue will open for subscription on January 20, 2026 and will close on January 22, 2026.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 10 and is priced 11.8 times of its face value on the lower side and 12.4 times on the higher side.
• Book running lead managers to the issue are ICICI Securities, Morgan Stanley India Company and JM Financial.
• Compliance Officer for the issue is Krishnakanth G V.

Profile of the company

The company is a new-age, technology-led third-party logistics (3PL) company, and leverages technology to facilitate digital commerce, with its service network encompassing 14,758 Indian pin codes as of September 30, 2025. It serves a wide category of enterprise clients including horizontal and non-horizontal e-commerce, quick commerce, food marketplace, and on-demand mobility companies. Its range of services includes express forward parcel deliveries, reverse pickups and hand-in-hand exchange deliveries, prime deliveries, quick commerce and on-demand hyperlocal deliveries, mobility, and other services, including critical logistics enabling it to cater to the most diverse and complex needs of its clients.

One of the key drivers of the next wave of growth for 3PL providers will come from solutions that enhance the end-customer experience. The company is committed to leveraging innovation and efficiency to enhance client experience, which it expects will be driven by three key factors: Velocity, Versatility, and Value. To facilitate the penetration of digital commerce in India and offer its clients the ideal solutions for their end consumers, it relies on its (i) nationwide network infrastructure, (ii) last mile intra-city network of gig-based delivery partners, and (iii) proprietary technology platform, including a sophisticated supply demand allocation engine.

It is direct beneficiaries of India’s expanding digital funnel and shifting demographics that are fueling the growth of the online retail market and convenience led consumption. An increasing number of consumers are turning to online channels not just for shopping but also for services for ordering food, groceries and booking cabs, among others. In comparison to global markets, India continues to show substantial room for growth in online retail. A majority of its revenue from operations is derived from services where it delivers directly to the end-customer. Its platform supports a wide range of time-sensitive and flexible delivery needs of its diverse set of clients like Meesho, Flipkart, Myntra, Swiggy, Bigbasket, Zepto, Nykaa, Blinkit, Kartrocket, Zomato, Uber, Pincode, Purplle, Licious, ONDC, Magicpin, amongst others, making it the only player of scale to service last mile and end-to-end delivery for e-commerce, and last-mile delivery for quick commerce, food delivery and other hyperlocal services.

Proceed is being used for:

• Funding of capital expenditure requirements of the company in relation to its network infrastructure.
• Funding of lease payments for new first mile centers, last mile centers and sort centers.
• Funding of branding, marketing and communication costs.
• Unidentified inorganic acquisitions and general corporate purposes.

Industry Overview

India's logistics market is a dynamic ecosystem catering to both B2B and B2C segments. B2B logistics primarily focuses on bulk movement of goods for industrial and commercial purposes between manufacturers, suppliers, distributors, and retailers. On the other hand, the B2C and C2C segments focus on smaller shipments catering directly to end consumers and individual needs. B2C logistics is divided into offline and online channels. Offline B2C logistics largely serves traditional retail channel often relying on local transport providers. In contrast, online B2C logistics, which includes e-commerce and hyperlocal delivery, is highly organized and technology-driven, featuring real-time tracking, automated supply chains, and efficient returns management. C2C logistics overlaps with B2C by enabling peer-to-peer shipments for personal needs, supported by courier services and app-based platforms.

As of FY 2025, the overall Indian logistics market is estimated to be at Rs 21-23 trillion ($247-270 billion) which grew at a CAGR of 2.5-5% since FY 2020. India’s Logistics Performance Index (“LPI”) increased to 3.4 in CY 2023, around 0.3 and approximately 0.4 points behind China and the USA, respectively. Calculated by the World Bank, the LPI scores countries on six key dimensions, i.e., customs efficiency, infrastructure quality, shipment ease, logistics service quality, tracking ability, and timeliness. In addition, logistics industry has benefitted from large pool of gig workers, that allows logistics players to have a flexible workforce that is scalable and agile. Their ability to work on demand allows logistics companies to adjust workforce capacity in real time, reducing idle costs and improve cost efficiency. Gig workers are broadly classified into platform and non-platform workers. Non-platform gig workers are generally casual wage workers and own-account workers working part-time or full time, such as contract workers.

The e-commerce logistics ecosystem in India has seen a growth of 28-31% in the previous five financial years to reach 4.9-5.3 billion shipments in FY 2025. This is projected to reach 15-16 billion shipments in FY 2030, growing at 23-27% CAGR. As of FY 2025, India is at 3-4 shipments per capita which is much lower than global counterparts like China and the USA with 75- 85 and 60-70 shipments per capita respectively, highlighting the substantial untapped growth potential within India’s ecommerce logistics market.

Pros and strengths

Agile and customisable logistics services: The company is the only 3PL of scale in India offering both end-to-end delivery for e-commerce and last-mile delivery for quick commerce, food delivery, and other hyperlocal use cases. It serves the diverse and complex needs of its clients and end-consumers through a comprehensive suite of express logistics solutions, including forward parcel delivery, reverse pickups and hand-in-hand exchange logistics, prime delivery, quick commerce, on-demand hyperlocal delivery, and critical item logistics. As a result, it is the largest 3PL provider in India for value-added services such as reverse pickups logistics, hand-in-hand exchange deliveries, same day, and quick commerce, by order volume for the Financial Year 2025 and the six months period ended September 30, 2025.

Largest last-mile gig-based delivery partner infrastructure: Among the 3PL e-commerce players, its platform had access to India’s largest crowdsourced last-mile delivery fleet, in terms of average monthly transacting delivery partners as of the Financial Year 2025 and the six months period ended September 30, 2025. For the six months period ended September 30, 2025, its platform had 205,864 Average Quarterly Unique Transacting Delivery Partners across more than 2,300 cities. Its last-mile operations are executed through a dynamic, gig-based fleet, ensuring seamless end-consumer experiences while delivering strong value through cost efficiency for its digital commerce clients. Its platform, which offers diversified earning and skill enhancement opportunities, flexible work structures, transparent payout structure, and various other benefits such as accidental and medical insurance, has positioned it as the preferred platform for gig-based delivery partners.

Extensive nationwide network: Its network infrastructure serves as the backbone of its efficient and scalable delivery system, encompassing first-mile, middle-mile, and last-mile facilities. As of September 30, 2025, it had the ability to service 14,758 pin codes through its network of more than 4,299 touch points across first and last mile centers, franchisee partners, and sort centers. Leveraging automation and technology across its network, it maintains operational control over its infrastructure ensuring high quality of end consumer experience and higher efficiency. It has fully automated sort centers in Surat, Bilaspur, and Jaipur. It operates on a leased model for all its trucks and properties (excluding franchisee centers) as of September 30, 2025. It had the highest capital turnover ratio among the 3PL peers in India.

Proprietary and agile technology capabilities: The company has built a technology led logistics platform that is custom built for enabling digital commerce penetration in India. Its technology first approach helps it to continuously increase scale, increase efficiencies and innovate to address the varying and changing needs of its clients. The technology platform allows it to manage a diverse range of service offerings and a flexible, dynamic delivery partner network while maintaining high standards of client experience and operational excellence. This balance of maximizing client experience while leveraging a gig-based delivery fleet is orchestrated through a sophisticated network of integrations, user-facing applications, and multiple AI-driven optimization engines. It has built a microservices architecture stack that enables seamless customization. These technology modules are developed in-house by its technology and product engineering teams, ensuring effortless integration catering to multiple logistics use cases. This flexibility allows it to route differentiated services through the same technology stack.

Risks and concerns

Depends on top 10 customers: It relies on key commercial relationships with its clients. Its top 10 customers contributed 84.32%, 88.75%, 86.14%, 90.74%, and 92.12 % of its revenue from operations for the six months period ended September 30, 2025, and September 30, 2024, and the Financial Years 2025, 2024, and 2023, respectively. The loss of any such key commercial relationships could adversely affect its business. A high concentration of revenue from a limited number of clients, poses a significant risk to its financial stability and operational resilience. Should it experience the loss or reduction of business from any of these key clients, it could materially impact its revenue and profitability.

Rely on crowdsourced network of delivery partners: A large and flexible network of delivery partners, combined with its technology initiatives, is instrumental to its success. Amongst the 3PL e-commerce players, it had access to India’s largest crowdsourced last-mile delivery fleet, among 3PL e-commerce players. It relies on its crowdsourced network of delivery partners, comprising of 205,864 Average Quarterly Unique Transacting Delivery Partners as of September 30, 2025, with whom it does not have any exclusive arrangements, for certain aspects of its business, and any change to the supply of delivery partners may disrupt its business operations, lead to additional losses and expose it to additional risks.

Dependence on third-party franchisees for last-mile delivery: In addition to its delivery partners, it also utilises a franchise model for last-mile deliveries, involving agreements with specific third parties to handle these deliveries. Relying on franchise model for last-mile delivery presents certain operational risks, such as the theft of goods and the loss of cash collected during deliveries, which it has experienced in the past. Additionally, it may be held accountable if its third-party franchisees engage in fraudulent activities or violate any applicable laws and regulations. As it depends on third-party franchisees to complete deliveries, their performance directly affects its service quality and client and customer satisfaction. Any failure or inconsistency by these franchisees, such as delays or mishandling of deliveries, could damage its reputation and lead to client and customer dissatisfaction. Furthermore, any changes in the business relationship with its franchisees, including disputes or terminations, could disrupt its delivery services and adversely impact its financial performance.

Any mishandling of goods by delivery partners: Delivery partners can sometimes mishandle goods, often stemming from pressures related to meeting tight delivery schedules or from insufficient training. In this fast-paced environment, errors may occur, such as improper stacking, inadequate securing of goods, or exposure to harmful environmental conditions, all of which can increase the likelihood of products sustaining damage during transit. The result of such mishandling not only impacts the physical condition of the goods but also potentially leads to an increase in return rates from dissatisfied clients and customers. Handling these returns entails additional logistical efforts and financial costs, straining its resources and operational efficiency. Any mishandling of goods by its delivery partners may lead to operational inefficiencies and client dissatisfaction, which may affect its business, financial condition and results of operation.

Outlook

Shadowfax Technologies is in the business of providing platform for logistics services using technology to Business-to-Business customers. It serves a wide category of enterprise clients including horizontal and non-horizontal e-commerce, quick commerce, food marketplace, and on-demand mobility companies. On the concern side, it operates in a competitive industry, which could adversely affect its results of operations and market share. It competes based on a number of factors, including the breadth of its services, network flexibility and stability, operational capabilities, infrastructure capacity, cost, pricing and service quality. If it cannot effectively control its costs and is required to increase its pricing in line with any cost increases, it could lose clients, and its market share and revenue could decline. Its competitors may attempt to gain market share by lowering their rates, especially during economic slowdowns or in key regional markets. Such rate reductions may limit its ability to maintain or increase its rates and operating margins and impede its ability to grow its business.

The issue has been offering 16,16,32,964 equity shares in a price band of Rs 118-124 per equity share. The aggregate size of the offer is around Rs 1907.26 crore to Rs 2004.24 crore based on lower and upper price band respectively. Minimum application is to be made for 120 shares and in multiples thereon, thereafter. On performance front, the revenue from operations increased by 31.85% to Rs 24,851.31 million for the Financial Year 2025 from Rs 18,848.22 million for the Financial Year 2024. Moreover, the company earned a profit of Rs 64.26 million for the Financial Year 2025 as compared to a loss of Rs 118.82 million for the Financial Year 2024.

Meanwhile, the company aims to develop capabilities in banking, financial services and insurance (BFSI) parcel deliveries and cross-border parcel deliveries, further expanding its expertise in express logistics. Additionally, it aims to build on its express B2B parcel capabilities to support time-critical inter-city and intra-city deliveries. As part of its evolution, it also aims to enhance its ability to handle large-sized and heavy shipments by leveraging its flexible infrastructure and linehaul network. It also intends to selectively pursue reverse lane monetization through partial truckload models within the broader B2B segment. Through such expansion strategies, it aims to increase its share of wallet across clients, strengthen network utilization, and unlock operating leverage. Its platform’s configurability and capital-efficient model allow it to enter and scale new service lines, and remain an enabler of digital commerce in India’s evolving logistics landscape.