In a significant move in the primary market, Shadowfax Technologies Ltd., a high-growth technology firm, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) worth up to ₹1,907.27 crore.
Shadowfax IPO is a mix of a fresh issue of shares and an Offer for Sale (OFS) by existing shareholders, signaling both capital infusion for future growth and a partial exit for early investors.
Key Details of the Offer:
Total Issue Size: ₹1,907.27 crore.
Fresh Issue: ₹1,000 crore. The capital raised will be used for funding growth initiatives, product development, and strengthening the balance sheet.
Offer for Sale (OFS): ₹907.27 crore, where existing investors will offload 7.31 crore shares.
Face Value: ₹10 per share.
- Lot size: 120
- Listing: The shares will be listed on both the BSE and NSE.
A Story of Financial Turnaround
The IPO comes on the back of a remarkable financial turnaround for the company. The Key Performance Indicators (KPIs) reveal a journey from significant losses to emerging profitability:
Profitability Swing: Shadowfax reported a Profit After Tax (PAT) of ₹21.04 crore for the six months ending September 2025, a stark contrast to the loss of ₹11.88 crore in FY24 and a deeper loss of ₹142.64 crore in FY23.
Strong Revenue Growth: Total Income has shown consistent growth, rising from ₹1,422.89 crore in FY23 to an annualized run-rate suggesting strong performance in FY26.
Improved Operational Efficiency: EBITDA turned positive in FY24 (₹11.37 crore) and has grown substantially to ₹64.34 crore (annualized) as of Sep-25.
Strengthening Equity Base: Net Worth has surged from ₹176.32 crore in FY23 to ₹693.53 crore (annualized) in Sep-25, indicating a healthier balance sheet.
Valuation and Shareholding
Pre-IPO, Shadowfax has 49.75 crore outstanding shares. Post the fresh issue, the total number of shares will increase to 57.81 crore.
The Price-to-Earnings (P/E) ratio based on March 2025 earnings stands at a high 1,017.96 pre-IPO. Post-IPO, based on annualized Sep-25 earnings, the P/E is projected to be 170.39. This high valuation multiple is likely premised on Shadowfax’s aggressive growth trajectory and market potential in its sector.
Challenges and Strengths
While the path to profitability is clear, the Return on Net Worth (RONW), though improved to 3.03% (annualized Sep-25), remains modest. The company’s total borrowings have increased to ₹147.44 crore (annualized) but remain manageable relative to its net worth and asset base.
Market Outlook
“This IPO represents a classic growth-tech story,” said a market analyst on condition of anonymity. “Investors will be betting on the sustainability of this turnaround. The key will be the company’s ability to justify its premium valuation by maintaining its growth momentum and scaling profitability further.”
The bookbuilding process will determine the final offer price. The IPO is expected to hit the markets in the coming months, subject to regulatory approvals.
