Know Price, GMP, Financials Before Investing

Delhivery IPO: Delhivery, a logistics and supply chain startup, will open its initial public offering on May 11 and close it on May 13. The company aims to raise Rs 5,235 crore from its maiden offer. Delhivery is the largest fully integrated logistics services company in India by revenue. It has built a network covering every state, servicing 17,045 PIN codes, or 88 per cent of the 19,300 PIN codes in India. The Gurugram-based company became a unicorn – valued at over $1 billion – when it raised $413 million in a Series F round led by SoftBank Vision Fund in 2019.

Delhivery IPO Price Band

The price band for Delhivery IPO has been fixed at Rs 462-487. Investors can bid for a minimum of 30 equity shares and in multiples thereof. Employees will get a discount of Rs 25 per equity share.

Delhivery IPO Issue Size

The Delhivery IPO issue is around Rs 5,235 crore, consisting of a fresh issue of Rs 4,000 crore, and Offer for Sale of Rs 1,235 crore.

Delhivery IPO Reserved Portions

The company has set aside 10 per cent for retail individual investors (RII). Around 75 per cent of the total offer has been allocated for qualified institutional buyers (QIB). For non-institutional investors (NII), the company has reserved 15 per cent.

Delhivery IPO Share 

CA Swift Investments, an entity of Carlyle Group, will offload shares to the tune of Rs 454 crore. SVF Doorbell (Cayman) Ltd, an arm of Softbank Group, will sell shares worth Rs 365 crore. Deli CMF Pte Ltd, a wholly-owned subsidiary of private equity fund China Momentum Fund, L.P. will sell shares worth Rs 200 crore and Times Internet will sell shares worth Rs 165 crore.

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Additionally, Delhivery’s co-founders — Kapil Bharati, Mohit Tandon and Suraj Saharan — will sell shares worth Rs 5 crore, Rs 40 crore and Rs 6 crore, respectively.

Delhivery IPO GMP

As per market observers, Delhivery shares are available at a premium (GMP) of Rs 16 in the grey market during the weekend. Delhivery shares have fallen almost 40 per cent in the unlisted market from a peak of Rs 950 apiece in January. The stock is quoting at Rs 550-600 on thin trading volumes, an expert said.

Delhivery IPO Objectives

Delhivery plans to utilise the funds raised from its initial public offering for organic growth initiatives. It will also allocate money for inorganic growth through acquisitions and strategic initiatives and for general corporate purposes.

Delhivery IPO: Key Highlights

Delhivery was started in June, 2011, Delhivery is the largest and fastest-growing fully-integrated logistics services player in India by revenue as of fiscal 2021. It operates a pan-India network and provides its services in 17,488 postal index number codes, as of December 31, 2021.

It provided supply chain solutions to a diverse base of 23,113 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers, and enterprises and SMEs across several verticals. Around 64 per cent of the revenue created by the company was from loyal customers that have been transacting for three years.

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Delhivery IPO Financials

Delhivery has never reported a profit, according to its share-sale prospectus. The company made a loss of Rs 891.14 crore for the nine months ended December 2021 and posted a Rs 415.7 crore loss in FY21. Revenue was Rs 4,911 crore in the nine months ended December and Rs 3,838 crore in FY21. It reported a negative free cash flow of Rs 246 crore in FY21 versus Rs 848 crore in FY20. Freight, handling and servicing costs rose to Rs 3,480 crore in the first nine month of FY22 from Rs 2,026 crore in FY21.

Delhivery IPO Key Risks

Analysts said some of the key risks that are material to the operating model of Delhivery include: heavy dependence on e-commerce despite diversifying into other industry verticals, dependency on network partners and other third parties for transportation vehicles and staff, lower entry barriers in many of the segments in which it operates, which has increased competition from organised and unorganised players, and dependency on certain large customers who contribute significantly to its business.

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