ShadowFax Files Updated DRHP for INR 2,000 Crore IPO, Early Investors to Offload Stakes

ShadowFax, a logistics startup backed by Flipkart, has filed its updated Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO) aiming to raise INR 2,000 crore. The IPO structure includes INR 1,000 crore from a fresh issue of shares, which will provide capital for the company's growth, and another INR 1,000 crore from an Offer-for-Sale (OFS).

Through the OFS, several early investors are looking to partially exit their investments. Flipkart plans to offload shares worth up to INR 237 crore, Eight Roads Ventures up to INR 197 crore, TPG Inc up to INR 150 crore, and Nokia Growth Partners up to INR 100.8 crore. Snapdeal co-founders Kunal Bahl and Rohit Bansal will also sell shares worth INR 14 crore each.

ShadowFax provides last-mile delivery services to e-commerce platforms and D2C brands. Founded in 2015, the company has seen significant expansion in its logistics network and serviceable pin codes. Financially, ShadowFax has demonstrated a turnaround, posting a profit of INR 6 crore in FY25 compared to a loss of INR 12 crore in FY24. Operating revenue also grew by 32% year-on-year to INR 2,485 crore. In the first half of FY26, net profit jumped to INR 21 crore from INR 9.8 crore in the prior year period.

Risks include high client concentration, with nearly half of FY25 revenue from its top five clients (Meesho and Flipkart contributing around 74.5%). The company also faces stiff competition from established players, potential regulatory challenges, and margin pressures.

Impact: This IPO filing is significant for the Indian stock market as it introduces a new player in the rapidly growing logistics and transportation sector. It offers investors an opportunity to participate in the growth of a company that has shown financial recovery and expansion. The successful listing could boost investor sentiment for similar logistics companies. Rating: 8/10

Difficult Terms: • Draft Red Herring Prospectus (DRHP): A preliminary document filed with the stock market regulator (SEBI in India) by a company planning an IPO, detailing its business, financials, and risks. • Public Issue: The process of selling shares to the general public to raise capital. • Fresh Issue: Issuance of new shares by a company to raise funds for its operations and expansion. • Offer-for-Sale (OFS): A part of an IPO where existing shareholders sell their shares to new investors; proceeds go to the sellers, not the company. • Logistics Unicorn: A privately held startup company valued at over $1 billion in the logistics sector. • Institutional Shareholders: Organizations like mutual funds, pension funds, or investment firms that invest in a company. • Equity: Ownership interest in a company, represented by shares. • Promoters: Individuals or entities instrumental in forming and managing a company, holding significant stake. • D2C (Direct-to-Consumer) brands: Brands selling products directly to consumers online. • Reverse Logistics: Process of moving goods from their destination back to the origin for returns, repairs, or disposal. • FY25 (Financial Year 2025): The fiscal year ending March 31, 2025. • YoY (Year-on-Year): Comparison of metrics from one year to the same period the previous year. • H1 FY26 (First Half of Financial Year 2026): The period from April 1, 2025, to September 30, 2025. • Hyperlocal Delivery: Delivery services within a small geographic area, often for quick commerce or local retail.