Even at a 9% discount, Shadowfax offers early investors profits of up to ten times

Shadowfax Shares List at Discount, Market Cap Still Above Last Private Valuation

New-age logistics firm Shadowfax made a muted stock market debut on Wednesday, with its shares listing at a discount of about 9% to the issue price.

Despite the weak opening, Shadowfax’s market capitalisation stood at around ₹6,510 crore at listing, above its last private valuation of approximately ₹6,000 crore, resulting in a notional increase in the wealth of its founders and early investors. The company’s IPO had valued it at ₹7,169 crore on a post-money basis.

The stock extended its losses during the session to close at ₹109.9 per share on the BSE, taking the company’s market capitalisation to about ₹6,353 crore.

Following the public issue, cofounders and promoters Abhishek Bansal and Vaibhav Khandelwal hold 9.28% and 7.22% stakes, respectively. Based on the closing price, their holdings are valued at roughly ₹597 crore and ₹464 crore.

“We, as a company, are still very young and are long-term believers in what we are building. This is a promoter-driven listing, which means we are not planning to sell any stock over the next six quarters,” Bansal told The Economic Times on the sidelines of the listing ceremony.

Investor gains

Eight Roads Ventures, one of Shadowfax’s earliest backers, is sitting on nearly 10-times paper gains on its investment made more than a decade ago. The investor holds a 9.49% stake post listing and sold shares worth ₹197 crore through the IPO. Its remaining stake is valued at about ₹611 crore.

“This is a company that has barely begun its journey. What India has seen in the past decade is only the start of ecommerce penetration,” said Aditya Gurunath Systla, partner at Eight Roads Ventures. “Shadowfax is well positioned because speed will be the key differentiator for end customers. While we participated in the OFS, we continue to hold a significant stake.”

Ecommerce major Flipkart, which first invested in Shadowfax in 2022, is sitting on an estimated 2.5-times paper gain. Flipkart sold shares worth about ₹400 crore in the secondary portion of the IPO and continues to hold a 7.28% stake, valued at roughly ₹469 crore.

TPG NewQuest, another major shareholder with an 11.52% holding, is expected to see around a two-fold paper gain, having invested in the Bengaluru-based company in 2024. It sold shares worth ₹45 crore through the offer-for-sale component, with its remaining stake valued at about ₹742 crore.

IPO details and sector context

Shadowfax reduced the size of its IPO to ₹1,907 crore from an earlier planned ₹2,000 crore. The company raised ₹1,000 crore through a fresh issue, while ₹907 crore came via an offer for sale.

Shadowfax is the second new-age logistics company to list in India after SoftBank-backed Delhivery, which went public in 2022 and currently has a market capitalisation of around ₹30,000 crore. Last year, Delhivery acquired rival Ecom Express in a distressed deal valuing the company at about ₹1,400 crore.