Shadowfax IPO: Why Brokers Are Taking a Wait-and-Watch Stance — Explained

Shadowfax is set to open its ₹1,907.27 crore initial public offering (IPO) on Tuesday, January 20, 2026, with the issue remaining open for subscription until January 22. The grey-market sentiment ahead of the listing looked positive. As of 12:30 pm on Monday, the IPO was trading at a grey market premium of ₹11 (about 8.87%), according to investorgain.

The lot size is 120 shares, implying a minimum retail investment of ₹14,160. The tentative allotment is scheduled on January 23 and listing is expected on January 28, 2026.

The offering consists of a ₹1,000 crore fresh issue and an offer-for-sale of ₹907.27 crore by existing shareholders, including Flipkart and Eight Roads.

The logistics platform reported its first full-year profit in FY25, posting a net profit of ₹6.06 crore. Profitability strengthened further in H1 FY26, with net profit rising to ₹21.04 crore on operating revenue of ₹1,819.80 crore, reflecting improving unit economics as volumes scaled.

The company plans to use the ₹1,000 crore fresh issue largely to expand capacity and build its brand. About ₹423.43 crore has been earmarked for network infrastructure, ₹138.64 crore for lease payments on new centres, and ₹88.57 crore for branding and marketing, with the remainder to be used for general corporate purposes and growth initiatives.

Market Sentiment on Shadowfax IPO

Most brokerage firms have a “neutral” stance on the Shadowfax IPO. SBI Securities notes that at the upper price band of ₹124 apiece, the issue implies an (Enterprise Value) EV/Sales multiple of 2.4x and an EV/EBITDA multiple of 106.5x.

The broker highlights Shadowfax’s 32.5% revenue CAGR for FY23-FY25, its asset-light model with asset turnover above 4x and the long-term growth upside from low per-capita shipments in India versus developed markets, but it still maintains a neutral stance, preferring to watch post-listing price discovery.

Swastika echoes similar stance on the IPO, pointing out that revenue momentum is improving but profitability and margin visibility remain uncertain.

"At a price-to-sales multiple of about 2.8x, the IPO is priced at a premium to listed peer Delhivery and warns of customer concentration risk, noting a large share of revenue comes from two clients, Flipkart (also an investor) and Meesho," the company wrote in its latest note.

The brokerage recommended the issue mainly for high-risk, long-term investors, advising conservative investors to wait until after listing.

However, SMIFS has recommended a 'subscribe' rating, citing the logistics sector’s long-term growth dynamics and Shadowfax’s role within it. Currently, the Indian logistics market is valued at $247-270 billion in FY25, and is projected to expand at a healthy 6-8% CAGR through FY30.

Within this high-growth market, SMIFS says that Shadowfax operates as the fastest-growing 3PL provider of scale, expanding market share from ~8% in FY22 to ~23% by H1FY26, with market-leading positions in reverse pickup logistics, same-day delivery, and quick commerce solutions; segments that command premium pricing and sticky customer relationships.

It also notes that the company's diversified revenue mix across Express (69% of revenue), Hyperlocal (21%), and Other Logistics Services (10%) mitigates concentration risk while enabling meaningful operating leverage; EBITDA margins have improved from -8.02% in FY23 to 3.56% in H1FY26 despite sustained network expansion, signalling strong structural unit economics.

"We recommend growth-focused investors to subscribe to the issue with a multi-year investment horizon, as Shadowfax's market leadership, technology moat, and favourable industry tailwinds position the company to capture significant share of India's ~₹21-23 trillion addressable logistics market opportunity," it added.

What Led to Neutral Sentiment?

Shadowfax’s draft red herring prospectus (DRHP) lists its core strengths as a tech-enabled B2B logistics platform with a pan-India service network covering many pin codes.

It has diversified service offerings across express, hyperlocal and on-demand segments and long-standing relationships with major e-commerce merchants, like Flipkart and Meesho. Those assets have supported scale and market-share gains in recent years.

The DRHP also flags notable risks. The company has reported losses and negative cash flows in certain earlier periods. Its revenue is materially dependent on a limited number of large enterprise clients.

The operations rely on an extensive leased logistics and delivery network and the business is exposed to regulatory, operational, labour, infrastructure and technology-related risks that could affect margins and growth.

In short, Shadowfax’s IPO offers exposure to India’s expanding last-mile logistics market and improving unit economics, but it arrives at a valuation some brokers view as a premium and carries execution and client-concentration risks. Most analysts are neutral going into the listing and recommend that investors seeking lower risk wait for post-listing price discovery and early public-market performance.