SoftBank arm seeks CCI nod to raise stake in Delhivery

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Updated: October 2, 2019 6:43:05 AM

Analysts at the firm said a set of individual shareholders who cumulatively hold 0.56% and a few institutions such as Times Internet and one Nexus fund may want to cash out.

 

Recently, Delhivery received funding of 5 million from Canada Pension Plan Investment Board (CPPIB). So far, the firm has raised close to 0 million.

SoftBank Vision Fund (SVF) affiliate SVF Doorbell (Cayman) has filed an application with the Competition Commission of India (CCI) seeking to increase its stake in Delhivery, according to the filing on the CCI website and note by business signals platform paper.vc.
The filing proposes a secondary transaction — purchase of shares from existing shareholders constituting 3.28% of the fully diluted capital of the company.

SoftBank’s shareholding in Delhivery will increase to 25.72% from the current holding of 22.44% after the CCI’s approval to the transaction, analysts at paper.vc said.

SoftBank, which invested a whopping $413 million in the Gurgaon-based logistics firm earlier this year, valuing it at about $1.5 billion, is the largest shareholder in Delhivery.

Tiger Global and Nexus Venture Partners hold 15.38% and 14.77%, respectively in the company, according to paper.vc. Delhivery founders Sahil Barua, Mohit Tandon, Suraj Saharan, Kapil Bharti and Bhavesh Manglani collectively hold 8.51% in the company.

“It is yet unclear which shareholder or shareholders are selling their shares, though we estimate the cash consideration for this deal would be in the range of $50 million,” said Vivek Durai, founder at paper.vc.

Analysts at the firm said a set of individual shareholders who cumulatively hold 0.56% and a few institutions such as Times Internet and one Nexus fund may want to cash out.

Transportation, fulfilment services and technology are what Delhivery offers across more than 17,500 of India’s 40,000 pin codes. The company delivers a million parcels a day, up from an estimated 1.2 lakh parcels a day in June 2015. Customers include large e-tailers, niche e-tailers, online merchants and enterprises (omnichannel services to large brands).

The firm claims to have fulfilled over 500 million orders till date.  Delhivery’s revenue from operations increased to Rs 1,019.37 crore in the year to March 2018 from revenues of Rs 738.32 crore reported in FY17.

Moreover, losses were high at close to Rs 700 crore in 2017-18 partly because the business has needed investments. Nonetheless, analysts say the business model is scalable, given the big jump in internet shoppers and the exponential growth in e-retailing.

Delhivery has added warehousing space at a rapid pace to 7 million sq ft, again a tenfold jump in four years. Delhivery competes with players such ECom Express and Rivigo. Recently, Delhivery received funding of $115 million from Canada Pension Plan Investment Board (CPPIB). So far, the firm has raised close to $800 million.

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