Shadowfax Technologies expects to maintain steady revenue growth of 23-25% on a compounded basis, supported by market share gains and expansion in value-added logistics services. The logistics provider's ₹1,907.00 crore initial public offering opened for investors on January 20 and will close on January 22.

Strong Revenue Growth Trajectory

The company has demonstrated robust growth momentum, with revenue expanding at approximately 32.50% annually between FY23 and FY25. In the first half of the current financial year, Shadowfax reported 68.00% growth. Founder and CEO Abhishek Bansal attributed this surge to recovery in consumption, higher digital adoption, and consolidation in the logistics sector.

Market Share Expansion

Shadowfax has significantly expanded its market presence, with market share increasing from approximately 8.00% in FY22 to nearly 23.00% in the current financial year. This growth has been driven by the company's strategic focus on value-added services including same-day delivery, omnichannel logistics, and reverse logistics.

Business Segment Performance

Value-added services have become a cornerstone of Shadowfax's business model, now contributing 40-45% of total revenue. These services, which are harder to replicate, provide stronger profitability support compared to traditional logistics offerings. Quick commerce currently accounts for approximately 20.00% of the company's business and is expected to grow faster than the overall business.

Financial Turnaround

The company has achieved a remarkable financial transformation, moving from negative margins in FY23 to positive performance across key metrics. Shadowfax reached EBITDA break-even, followed by positive EBITDA and net margins, and achieved positive free cash flow in the current year. Management expects margins to rise further as network utilisation improves.

Operational Highlights

Shadowfax's top 10 customers account for approximately 74.00% of total revenue, though management indicated that client diversification by large customers is largely complete and market conditions have stabilised. The company maintains average earnings for gig workers in top cities between ₹110.00 and ₹120.00 per hour.

The logistics provider continues to see opportunities for market share gains in e-commerce logistics while expanding its presence in the fast-growing quick commerce segment, positioning itself for sustained growth in the evolving logistics landscape.

Shadowfax Technologies' initial public offering opened for public bidding on January 20, achieving a 4% subscription rate on the first day. The Bengaluru-based logistics solutions provider received bids for 39.80 lakh shares against an offer size of 8.91 crore shares, according to NSE data at 10:20 am.

Subscription Details by Investor Category

Retail investors demonstrated the strongest interest in the IPO, with subscription patterns varying significantly across investor categories:

Grey Market Premium Shows Declining Trend

The company's grey market premium has experienced a notable decline in recent days. According to Investorgain data, Shadowfax's unlisted shares were trading with a 4.84% grey market premium over the IPO price, representing a significant drop from previous levels.

IPO Watch reported a slightly higher grey market premium of 6.45% over the IPO price, indicating some variation in grey market assessments.

IPO Structure and Pricing

The ₹1,907.20 crore public offering comprises both fresh capital raising and existing investor exits:

The IPO remains open for public bidding until January 22, with allotments expected to be finalized by January 23 and listing scheduled for January 28.

Anchor Investor Participation

Prior to the public offering, Shadowfax successfully raised ₹856.02 crore from 39 anchor investors on January 19. The anchor book allocation included significant participation from domestic mutual funds:

ICICI Prudential AMC emerged as the largest anchor investor, acquiring 1.53 crore equity shares through four schemes including Flexicap Fund, Balanced Advantage Fund, Transportation and Logistics Fund, and Exports and Services Fund.

Fund Utilization Plans

The company plans to deploy proceeds from the fresh issue across multiple strategic initiatives:

• Network infrastructure capacity enhancement
• Lease payments for new first mile, last mile, and sort centres
• Branding, marketing, and communication initiatives
• Unidentified inorganic acquisitions
• General corporate purposes

The technology-led logistics solutions provider serves the rapidly expanding e-commerce and quick commerce sectors, positioning itself to benefit from the structural growth in India's logistics ecosystem.