Delhivery’s IPO will open for subscription on May 11. The price band is set at 462-487 Per Share, Valuation of the Company 35,283 crore at the upper end of the band.
However, there has been a reduction of one-third from the initial plan to increase the issue size. 7,460 crore due to volatility in equity markets.
Delhivery will be the first major IPO after a brief lull in activity as the companies scrapped plans to go public and avoid a confrontation with LIC after the Russian invasion of Ukraine. 21,000 crore IPO, India’s biggest opening share sale.
Investors’ reaction to Delhi’s IPO may determine whether other such startups will dare to go public in volatile markets.
delhivery will increase 4,000 crores by selling new shares and initial investors of the company will raise additional 1,235 crore through Offer for Sale (OFS).
The company said that the bids for the so-called anchor investors will open on May 10. The three-day IPO will close on May 13. Gurugram-based Delhivery will be listed on the exchanges on May 24.
Of the total issue size, 75% of the shares will be available for allocation to Qualified Institutional Buyers (QIBs), 15% to non-institutional investors and the remaining 10% to retail investors. About 60% of the QIBs are reserved for anchor investors.
Proceeds from the issue will fund the company’s acquisition and expansion plans, with a focus on automation, technology and other strategies.
“Delhivari has the appetite and ability to make large acquisitions and integrate them within the company. Delhivery has less than 0.5% of the $300 billion market opportunity,” said Sandeep Barsia, Chief Business Officer.
Under the sale offer, its shareholders, which include US private equity firm Carlyle Group, SoftBank, Fosun Group-owned China Momentum Fund and Times Internet, will sell a portion of their ownership in Delhivery.
Carlyle will sell shares worth 454 crore, down from the earlier plan to sell 920 crores; SoftBank will now sell its stake 365 crores, from below 750 crores.
Price shares to be sold through Fosun Daily CMF Pte Ltd 200 crore, half before 400 crore sales plan; And Times Will Sell To The Internet 165 crores.
In addition, Delhivery’s co-founders—Kapil Bharti (its chief technology officer), Mohit Tandon and Sooraj Saharan—will sell shares of value. 50 million, 40 crore and 6 crores respectively.
With 22.78% stake, SoftBank is the largest shareholder in Delhivery, while Nexus Ventures and Carlyle hold 9.23% and 7.42% respectively.
The three founders of the company have a relatively small stake. While Kapil Bharti holds 1.11%, Mohit Tandon holds 1.88% and Suraj Saharan holds 1.79%.
Delhivery was founded in 2011 by Sahil Barua, Mohit Tandon, Bhavesh Mangalani, Suraj Saharan and Kapil Bharti as a hyperlocal express logistics services firm. It became a unicorn in 2019, touching a valuation of $1 billion. It raised $277 million in May last year in a round led by Boston-based investment firm Fidelity at a valuation of $3 billion.
Covering 17,488 PIN (Postal Index Number) codes, Delhivery claims to be the largest and fastest growing fully integrated logistics services company in India by revenue as of FY 2011.
In FY21, it made . reported negative free cash flow of 246 crore as against 848 crore in FY20. At the same time, freight, handling and servicing costs have increased FY21 to . 2,026 crore in 3,480 crore in 9MFY22.
“In the last four years, the unit economics has improved. Adjusted Ebitda has increased from -11.3% to almost break even. If you look at just nine months, the second two quarters of FY 2012 on a combined basis are FY 2012. “We are quite at break-even,” said Amit Agarwal, chief financial officer, Delhivery.
Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Pvt. Ltd., BofA Securities India Ltd., and Citigroup Global Markets India Pvt. Ltd. is managing the share sale.