Delhivery, a supply chain startup, received $2,347 crore from anchor investors on Tuesday, ahead of its initial public offering (IPO), which begins today and ends on May 13. For its 5,235-crore initial share offer, the business has established a price range of 462-487 per share.
According to BSE data, as of 11:55 a.m. on day 1, the Delhivery IPO has been subscribed 0.04x, with retail category booking 0.20 times, employees 0.02 times, and NIIs and QIBs yet to bid.
The IPO's size has been reduced from the original plan of 7,460 crores to 5,235 crores. The public offering now includes a 4,000-crore fresh issuance of equity shares and a 1,235 crore Offer for Sale (OFS) component from existing shareholders.
Carlyle Group and SoftBank, as well as Delhivery's co-founders, will divest their shares in the logistics company under the OFS. According to market experts, the premium (GMP) on Delhivery shares is flat at $7 in the grey market today. On Tuesday, May 24, 2022, the company's shares are planned to be listed on the BSE and NSE stock markets.
"From a long-term perspective, we recommend Subscribe rating because it is the largest and fastest-growing 3PL express parcel delivery player, has a unified infrastructure network, a vast amount of data intelligence and R&D, an experienced professional management team, and strong relationships with a diverse customer base," said Yes Securities.
Delhivery's asset-light business model, cutting-edge engineering and automation capabilities, and new-age technologies, according to the brokerage, will enable the company to leverage its operating efficiencies and boost profitability in the next years.
The proceeds from the fresh issue will be used to fund organic growth efforts, inorganic expansion through acquisitions and other strategic projects, as well as general business reasons.
"Delhivery is a loss-making company, making it difficult to value solely on earnings; other listed competitors have profit margins ranging from 1.3 percent to 15.7 percent. Delhivery has scalability and a technology-driven, flexible business strategy that has to be proven in a price-sensitive Indian market."
"In the future, the company will have to choose between expansion and profitability, and investors can wait for a better entry moment to invest," PhillipCapital wrote in a note.
