On a weekday afternoon in South Delhi, a Shadowfax delivery rider eased his motorcycle into a housing society for a routine return pickup. The customer wasn’t home. “No problem, ma’am,” he said over the phone. “I can come tomorrow. Our hub is around.”

This being “around” is a business model. In Indian logistics, speed doesn’t come from technology so much as geography: a sprawl of warehouses, parcel-sorting centresOrders move through a layered network: parcels are first collected from sellers and funnelled into large sorting hubs; they are then routed through bigger first-mile centres that serve an entire city or region; and finally pushed out to smaller last-mile hubs that cover specific neighbourhoods and pincodes, and riders placed just close enough to make fast deliveries economical. 

And that density is now at the heart of Shadowfax’s public-market debut—likely on 28 January.

The Flipkart-backed logistics-services provider, which filed to raise nearly Rs 2,000 crore through its initial public offering (IPO), saw the issue subscribed 2.7 times. A chunk of the proceeds will not go towards new services or acquisitions, but to something far more prosaic: paying for space. 

Shadowfax has earmarkedThe Hindu BusinessLine about Rs 140 crore from the Rs 1,000 crore fresh issue for lease payments, while more than Rs 400 crore will be spent on building network infrastructure—connectivity hardware and systems software.

This would be a comfortable strategy if space were getting cheaper. But Shadowfax is expanding just as the warehousing market is becoming more expensive. Leasing activity roseET Infra nearly 20% year-on-year in 2025. Land prices in logistics hubs such as the National Capital Region (NCR) and Maharashtra’s Bhiwandi have more than doubled over the past three to four years. 

“Even if demand cools, warehousing rents are unlikely to correct sharply,” said Amit Goenka of Nisus Finance, a Mumbai-and-Dubai-based real-estate investor. He was pointing to the capital-intensive nature of compliant Grade-A supplyGrade A warehouses are modern, purpose-built storage facilities with high ceilings, strong floors, good safety systems, and easy access for large trucks.