Delhivery has fixed a price band of at Rs 462-487 per share for its Rs 5,235-crore IPO. Logistics services player Delhivery will issue and sell shares of face value of Re 1 each. The IPO will open on 11 May for subscription and close on 13 May. The logistics and supply chain startup cut its total issue size to Rs 5,235 crore from Rs 7,460 crore planned earlier. The public issue comprises the fresh issuance of shares worth Rs 4,000 crore. The offer for sale (OFS) portion has been reduced to Rs 1,235 crore from Rs 2,460 crore. Upon successful listing on BSE, NSE, Delhivery will join the likes of Blue Dart Express, TCI Express, and Mahindra Logistics.
The investors can bid for a minimum of 30 shares and in its multiple thereafter. The company has allocated shares worth Rs 20 crore to eligible employees, who will get a discount of Rs 25 per equity share during the bidding process. The company has reserved 75 per cent of the net offer for qualified institutional buyers (QIBs), whereas non-institutional buyers (NIIs) will get a 15 per cent allocation, and the remaining 10 per cent shares will be available for retail bidders.
Delhivery holds 22% market share in express parcel delivery segment
In the grey market on Thursday, Delhivery shares were seen quoting a premium at Rs 17 per share. Delhivery shares were ruling at Rs 504, a premium of 3.5 per cent to the IPO price, according to the people who deal in unlisted shares of the companies. Delhivery is the largest and fastest growing fully-integrated logistic services player in India by revenue as of FY21 covering 17,488 pincodes. Digital native business models like E-commerce, Social commerce are major drivers of growth for express parcel delivery segment where Delhivery holds almost 22% market share. The revenue growth has been robust with 49% CAGR from FY19-21. However, losses have risen in similar fashion, Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares, told FinancialExpress.com.
Doshi also added that the Delhivery offer is priced at almost 5.5x Mcap-to-Revenue based on post fresh issue and annualized metrics of 9MFY22. “The valuations seems to be in-line with peers but the company being loss-making makes the issue look expensive. Dicey market sentiments and concern of investors towards loss-making start-ups may dampen the interest,” he said.
Delhivery stock listing likely on 24 May
The book running lead managers to Delhivery IPO are Kotak Mahindra Capital Company, Morgan Stanley India Company Private Limited, BofA Securities India Limited, and Citigroup Global Markets India Private Limited. The registrar to the issue is Link Intime India Private Limited. The company will finalise the basis of allotment with designated stock exchange on 19 May, and initiation of refunds or unblocking of funds from ASBA accounts will take place on 20 May. The equity shares will get credited to demat accounts of allottees on 23 May. Delhivery IPO shares are likely to get listed on BSE and National Stock Exchange on 24 May.
Softbank largest shareholder in Delhivery
SoftBank is the largest shareholder in Delhivery with a 22.78 per cent stake. Nexus Ventures and Carlyle hold 9.23 per cent and 7.42 per cent stakes, respectively. The company’s three founders hold relatively small stakes. While Delhivery co-founders Kapil Bharati holds 1.11 per cent, Mohit Tandon owns 1.88 per cent and Suraj Saharan has a 1.79 per cent stake. Kapil Bharati will sell shares worth Rs 5 crore, Mohit Tandon will sell shares worth Rs 40 crore and Suraj Saharan is selling up to Rs 6 crore worth of shares in OFS.
Global private equity investor Carlyle will sell shares worth Rs 454 crore compared with Rs 920 crore planned earlier, SoftBank will now sell a stake worth Rs 365 crore, down from Rs 750 crore. Fosun group-owned China Momentum Fund, via its affiliate Deli CMF Pte Ltd, will sell up to Rs 200 crore. The OFS will comprise up to Rs 454 crore by CA Swift Investments, up to Rs 365 crore by SVF Doorbell Ltd, and up to Rs 165 crore by Times Internet.
Delhivery will utilise Rs 2,000 crore to finance growth in the existing lines of business and also to develop adjacent business lines. It proposes to expand the network infrastructure and upgrade the proprietary logistics operating system. The company has plans to use around Rs 1,000 crore to fund inorganic growth opportunities through acquisitions and other strategic initiatives.