Delhivery joins the IPO race: Files DRHP with Sebi to raise Rs 7,400 crore, seeks valuation of up to $5.5 billion

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November 03, 2021 5:15 AM

The IPO consists of a fresh issue of shares worth Rs 5,000 crore and an offer for sale (OFS) by existing investors amounting to Rs 2,460 crore, according to the company’s draft red herring prospectus (DRHP).

For the quarter ended June 30, 2021, Delhivery reported a total income of Rs 1,364 crore, over total expenses worth Rs 1,493 crore. The start-up, however, reported a net loss of Rs 129.58 crore during the June quarter.For the quarter ended June 30, 2021, Delhivery reported a total income of Rs 1,364 crore, over total expenses worth Rs 1,493 crore. The start-up, however, reported a net loss of Rs 129.58 crore during the June quarter.

Logistics start-up Delhivery on Tuesday filed its draft prospectus with the Securities and Exchange Board of India (Sebi) to raise up to Rs 7,460 crore through an initial public offering (IPO).

The IPO consists of a fresh issue of shares worth Rs 5,000 crore and an offer for sale (OFS) by existing investors amounting to Rs 2,460 crore, according to the company’s draft red herring prospectus (DRHP).

Carlyle Group, which owns a 7.42% shareholding in the company, is expected to offload shares worth Rs 920 crore. Also, SoftBank, which owns 22.78% in Delhivery, will offload shares worth Rs 750 crore. China Moment Fund will also sell shares worth Rs 400 crore and Times Internet will offload another Rs 330 crore through the OFS.

Delhivery founders Kapil Bharati, Mohit Tandon and Suraj Saharan are also expected to sell shares worth Rs 62 crore in the proposed IPO.

Kotak Mahindra Capital, Morgan Stanley India, BOFA Securities and Citigroup are the book running lead managers for the offering. Delhivery is seeking a valuation of around $5-5.5 billion from the proposed IPO.

Delhivery became a unicorn in 2019 when it raised $413 million in a Series F round led by SoftBank Vision Fund, along with existing investors Carlyle Group and Fosun International. It was then valued at $1.5 billion

The start-up plans to use the proceeds from the IPO for funding organic initiatives and inorganic growth initiatives including for acquisitions and other strategic capabilities.

While around Rs 2,500 crore is reserved for funding organic growth initiatives, another Rs 1,250 crore is reserved for growth through acquisitions and other strategic initiatives, the DRHP said.

“In case of any surplus after utilisation of the net proceeds towards the aforementioned objects, we may use such surplus towards general corporate purposes, provided that the total amount to be utilised towards general corporate purposes does not exceed 25% of the net proceeds in accordance with applicable law,” Delhivery said in its draft prospectus.

Delhivery competes with companies such as BlueDart, DTDC and Safexpress in areas like express parcel delivery, heavy goods delivery, PTL freight, TL freight, warehousing, supply chain solutions, cross-border express and freight services and supply chain software. The logistics start-up operates a pan-India network and provides services in 17,045 postal index number codes.

IPO-bound Delhivery also has significant presence in the e-commerce space serving to large list of 21,342 customers across e-commerce marketplaces, direct-to-consumer e-tailers, as well as enterprises and SMEs across several verticals such as FMCG, consumer durables, consumer electronics, lifestyle, retail, automotive and manufacturing.

For the quarter ended June 30, 2021, Delhivery reported a total income of Rs 1,364 crore, over total expenses worth Rs 1,493 crore. The start-up, however, reported a net loss of Rs 129.58 crore during the June quarter.

On the other hand, Delhivery’s annual income for FY21 stood at Rs 3,838.29 crore, a 28.4% year-on-year increase compared to Rs 2,988.62 crore in FY20. Its annual losses for FY21 stood at Rs 415.74 crore, which increased from Rs 268.92 crore.

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