Can a Rs 1,907 crore IPO transform India’s logistics sector? May be or may be not but the Bengaluru-based Shadowfax Technologies aims to find out. The logistic company is opening its initial public offering (IPO) on January 20. Ahead of its official opening, in the grey market, the share price of the company is trading at a premium.
Let’s take a look at the key factors every investor needs to track about this upcoming mainboard issue ahead of its opening.
Shadowfax IPO: Structure and objectives
The Shadowfax IPO is split into two parts. First, a fresh issue of equity shares worth Rs 1,000 crore. This amount is aimed at funding growth and expansion.
Secondly, existing shareholders are selling 7.32 crore shares via an Offer for Sale (OFS) valued at Rs 907 crore, enabling partial exit. Investors can bid for a minimum lot of 120 shares. The price band of the issue is set between the range of Rs 118-124 per share. At the upper band, retail investors need to invest around Rs 14,880 to apply.
Breaking down the fund utilisation, most of the proceeds will support operational expansion. About Rs 423 crore is placed for capital expenditure. This includes the first-mile and last-mile delivery centers and sorting facilities.
Thereafter, Rs 138 crore will go toward lease payments for new infrastructure. Similarly, Rs 88 crore will be spent on branding and marketing. After all these, the rest of the amount will remain flexible for acquisitions or general corporate use.
ICICI Securities is managing the IPO, while KFin Technologies has been appointed as the registrar for the issue.
Shadowfax IPO: Grey Market Premium trend
The IPO’s grey market premium (GMP) currently stands at Rs 11 per share. This indicates an estimated listing price of Rs 135, which is nearly 9% above the issue’s upper price band.
However, it is important to note that the GMP indicates potential listing gains but it is unofficial and can change rapidly.
Shadowfax IPO: Business overview of the company
Shadowfax was founded in 2015. This was a time when India’s e-commerce ecosystem was still figuring out how to move parcels efficiently beyond metros.
Meanwhile, over the past decade, logistics has become a backbone of online commerce. This has powered everything from marketplaces to quick commerce and food delivery.
Shadowfax has also evolved alongside this shift. The company has built infrastructure capable of delivering packages within 30-60 minutes in many cases.
Shadowfax IPO: Financial performance
Coming to the financial health of the company, in FY25, Shadowfax posted a total income of Rs 2,515 crore. This was up 32% from Rs 1,897 crore in FY24. EBITDA surged to Rs 56 crore from Rs 11 crore. In addition to it, the company reported a net profit of Rs 6 crore.
Shadowfax IPO: Analyst note
SBI Securities, in its IPO note on the Shadowfax IPO, said, “At the upper price band of Rs 124, the IPO is valued at EV/Sales and EV/EBITDA multiple of 2.4x and 106.5x, respectively. The company has exhibited strong revenue growth of 32.5% CAGR during the FY23-25 period and has been EBITDA positive since FY24. It operates an efficient and scalable asset-light business model, having an asset turnover of over 4x.”
“The company does not own any delivery vehicles while touchpoints and last-mile facilities are managed through a leasing model. Considering the low per capita shipment (3-5 in India) compared to 60-70 in the USA and 75-85 in China, the growth prospects appear promising. When comparing the issue with its closest peers, the IPO seems to be valued slightly at a premium. We maintain a ‘Neutral’ view on the IPO and intend to observe its performance post listing,” added the brokerage report.
Conclusion
With the listing expected around January 28 and allotment likely on January 23, this IPO remains one of the key offerings to watch in the logistics space.