Shadowfax Technologies IPO Subscription Progress and Key Details
The initial public offering (IPO) of logistics services provider Shadowfax Technologies Ltd has garnered significant attention in the market, with the public subscription reaching 60% by the second day of bidding on Wednesday, January 22. Based in Bengaluru, the company specializes in fast parcel delivery solutions primarily for the e-commerce sector, offering services such as e-commerce shipping, direct-to-consumer delivery, hyperlocal solutions, and quick commerce with same-day or within-hours fulfillment.
IPO Timeline and Financial Highlights
The Shadowfax Technologies IPO opened for subscription on January 20 and is scheduled to close on January 22. The price band has been set at ₹118 to ₹124 per share. Prior to the public offering, on January 19, the company successfully raised ₹856.02 crore from 39 anchor investors, demonstrating strong institutional interest.
The allotment of shares is expected to be finalized on Friday, January 23. Refunds will be processed on Tuesday, January 27, followed by the crediting of shares to the demat accounts of successful allottees later that same day. The shares are anticipated to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on Wednesday, January 28.
Grey Market Premium and Estimated Listing Price
The current grey market premium (GMP) for the Shadowfax IPO stands at ₹1.5. Based on the upper end of the IPO price band at ₹124, this GMP suggests an estimated listing price of approximately ₹125.5 per share, which represents a 1.21% increase over the issue price.
However, market analysts note that the GMP has shown a decreasing trend over the last ten sessions, with the lowest recorded at ₹0.00 and the highest reaching ₹16. The grey market premium is often viewed as an indicator of investor sentiment and their willingness to pay above the official issue price.
IPO Structure and Utilization of Funds
Shadowfax Technologies aims to raise a total of ₹1,907.3 crore through this IPO. This comprises ₹1,000 crore from the issuance of new shares and ₹907.3 crore from an offer-for-sale (OFS) by existing shareholders.
The company plans to allocate the raised capital strategically: ₹423.4 crore will be directed towards enhancing network infrastructure, ₹138.6 crore for leasing new first mile centers, last mile centers, and sorting facilities, and ₹88.5 crore for branding, marketing, and communication initiatives. The remaining funds will be utilized for potential acquisitions and general corporate purposes.
Shareholding Pattern and Key Stakeholders
The offer-for-sale involves several prominent investors, including Flipkart Internet, Eight Roads Investments Mauritius, International Finance Corporation, Qualcomm Asia Pacific, Nokia Growth Partners, NewQuest Asia Fund, and Mirae Asset. Among these, Flipkart Internet holds a 14.83% stake, Eight Roads Investments Mauritius owns 14.15%, and NewQuest Asia Fund possesses 14.08%.
The founders, Abhishek Bansal and Vaibhav Khandelwal, retain significant ownership with 10.76% and 8.37% stakes, respectively. The lead book-running managers for the IPO are ICICI Securities, Morgan Stanley India Company, and JM Financial, while Kfin Technologies Ltd. serves as the registrar.
Brokerage Reviews and Investment Recommendations
Various brokerages have provided their assessments of the Shadowfax Technologies IPO:
- Swastika Investmart highlighted the company's potential to benefit from the growth in India's last-mile logistics and e-commerce delivery markets. However, they noted that while revenue is increasing, profitability remains low, and margins are still evolving. With a Price-to-Sales (P/S) ratio of approximately 2.8x, the IPO is considered premium-priced compared to peers like Delhivery. The brokerage cautioned that a significant portion of revenue comes from just two clients: Flipkart and Meesho. They recommend this investment only for high-risk, long-term investors, suggesting conservative investors wait for post-listing clarity.
- SMIFS emphasized Shadowfax's diverse service portfolio, which includes forward parcel delivery, reverse pickups, hand-in-hand exchanges, prime delivery, and hyperlocal fulfillment. This creates high switching costs and opportunities to increase wallet share with major clients such as Flipkart, Meesho, Zepto, and Swiggy. The brokerage is optimistic about the company's expansion plans, aiming for over 2,160 new delivery centers by FY27, operational efficiencies to improve margins, and entry into high-margin sectors like BFSI and cross-border logistics, which could drive value creation in the medium to long term.
- Cholamandalam Securities pointed out the company's focus on offering additional value-added services, such as reverse pickups and hand-in-hand exchanges, which require rigorous monitoring and quality assessments. They have given a 'SUBSCRIBE' recommendation, anticipating potential listing gains.
- Sushil Finance analyzed the valuation, noting that the offering is priced at a price-to-book value (P/BV) of 9.21 based on a net asset value (NAV) of ₹13.46 as of the first half of FY26. If FY25 earnings are annualized, the price-to-earnings (P/E) ratio stands at approximately 160x, compared to an industry average of around 123x. The brokerage described the business as being in a high-leverage, high-growth phase with improving financials but profitability still impacted by operational performance. They consider the pricing aggressive and suggest that only high-risk-tolerant investors consider it for long-term investment.
Subscription Status Update
As of the latest data, the Shadowfax IPO subscription status on day 3 stands at 2.70 times overall. The retail portion has been subscribed 2.23 times, the Non-Institutional Investors (NII) portion has been booked 83%, and the Qualified Institutional Buyers (QIBs) portion has received 3.81 times bids. The employee portion has been reserved 1.99 times.
The company has received bids for 24,07,91,640 shares against 8,90,88,807 shares on offer, as per data from the BSE at 16:06 IST. The subscription was 47% on day 1 and increased to 60% on day 2, indicating growing investor interest as the bidding period progresses.
Investors are advised to conduct thorough due diligence and consult with certified financial experts before making any investment decisions, considering the inherent risks and opportunities associated with this IPO.
