IPO Size: Rs. 1,907 cr

• Fresh Issue of Rs. 1,000 cr for (i) network infra capex Rs. 423 cr (ii) lease payment Rs. 139 cr (iii) branding Rs. 89 cr
• Offer for Sale (OFS) of Rs. 907 cr by 8 investors – 44% of OFS being Flipkart (halving 15% stake) and balance by 7 other investors Eight Roads, IFC, Nokia, Qualcomm (50% combined stake to drop to 36% post IPO)

Price band: Rs. 118-124 per share

M cap: Rs. 7,169 cr, implying 26.6% dilution

• Only 10% retail, as company reported loss for FY23 and FY24

IPO Date: Tue 20^th Jan to Thu 22^nd Jan 2026, Listing Wed 28^th Jan 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

3^rd Party Logistics (3PL) Company

Shadowfax Technologies, established in 2015 by 4 IIT Delhi founders, is a Bengaluru based last-mile logistics company, having 2.06 lakh delivery partners covering 14,758 pincodes across 2,300 Indian cities with 3.5 million sq of warehouse space.

Rs. 3,200 cr annual revenue is split 70:30 between:

• Express logistics: e-commerce shipment market share rose to 23%, from 8% four years ago
• Hyperlocal logistics: leading player for quick commerce and food delivery services, caters to most participants like Swiggy, Zomato, Blinkit, Zepto, Bigbasket, Uber, Licious etc.

Shadowfax counts Meesho, Flipkart, Myntra, Nykaa, Purplle, ONDC among other clients, with ~15% of revenue generated from its largest shareholder Flipkart Group.

Asset-Light Tech Business

Shadowfax has raised Rs. 1,200 cr capital till date, of which Rs. 411 cr is cash balance (net of lease liabilities and cash-on-delivery liability) as of 30.9.25. Thus, Rs. 750 cr has been invested in the business (for capex and operating expenses), implying a healthy capital efficiency ratio of nearly 4x, a good benchmark for technology business.

Low Single-Digit Operating Margin

On 44 cr orders delivered in FY25, revenue rose 32% YoY to Rs. 2,485 cr. Per order realisation has remained stagnant at ~Rs. 55, with growth being volume-led. In H1FY26, order volume rose 50% YoY to 29 cr with revenue up 68% YoY to Rs.1,806 cr. While business has been adjusted EBITDA positive for past 10 quarters, H1FY26 adjusted EBITDA was just Rs. 52 cr, implying 2.9% operating margin. H1FY26 PAT stood at Rs. 21 cr, including Rs. 14 cr other income. Thus, company is just about breaking even at net level.

Unattractive Pricing

Mcap of Rs. 7,169 cr and Enterprise Value (EV) of Rs. 6,760 cr implies an EV/revenue multiple of 1.8x and an EV/EBITDA multiple of 62x, on current year estimates. Larger peer Delhivery, with 5% reported Operating Margin and about 1.5% net margin on Rs. 9,400 cr topline, is trading at 3.1x revenue and 65x EBITDA multiple.

Even if we estimate Shadowfax doubling EBITDA in FY27E, one year forward EV/EBITDA multiple of 34x makes it fully priced. While Shadowfax has demonstrated disciplined capital deployment and healthy volume growth, IPO valuation is fully priced, given smaller scale and just about net breakeven, that too before the IPO.

Logistics is a vast opportunity but with low barriers to entry. Even after 3.5 years, Delhivery share price is still below its IPO price, despite turnaround in profits. Thus, logistics sector valuation multiples can fluctuate vastly.