In a shared hosting single IP address is shared among different websites, how does the web server knows which website to serve when any request comes.

It is in the name-based virtual hosting, which is also called shared IP hosting, the virtual hosts serve multiple hostnames on a single machine with a single IP address.

When a web browser requests a resource from a web server using HTTP/1.1 it includes the requested hostname as part of the request. The server uses this information to determine which web site to show the user.