The initial public offering (IPO) of logistics firm Delhivery was fully subscribed on Friday, the final day of bidding, thanks to demand from institutional investors. According to data available on the exchanges, the issue was subscribed 1.6 times, garnering bids for 101.6 million shares, against 62 million on offer. The public offer had been subscribed only 23% until the second day of the offering.
Despite challenging market conditions, last-minute bids from mutual funds and foreign institutional investors helped the issue go through on Friday. The portion set aside for qualified institutional buyers (includes MFs, FIIs) was subscribed 2.6 times on the final day. However, the quota for retail, employees and HNIs remained under-subscribed even on the final day of bidding. The retail quota was subscribed 57%, whereas the employee and HNI quota received 27% and 30% subscription, respectively.
Experts said the issue has hit the markets when they have been choppy and central banks are tightening policy to combat inflation, sucking out liquidity. Year to date, both the Sensex and Nifty have corrected around 9-10% amid these headwinds. Additionally, retail demand for new-age tech companies has been hit after the decline in stock prices of Paytm and Zomato.
Delhivery had planned to raise as much as Rs 5,235 crore through the maiden public offer, and the price band of the issue was set at Rs 462-487 per share. On listing, at the top-end, the logistics player will command market capitalisation of Rs 35,284 crore.
Earlier this week, the company had raised Rs Rs 2,346.74 crore from anchor investors, allocating a total of 4,81,87,860 equity shares at Rs 487 apiece. AIA Singapore, Tiger Global Investments Fund, and Societe Generale were among the top foreign investors that participated in the anchor book. Among domestic mutual funds, SBI MF, HDFC MF, ICICI Prudential MF, Mirae MF and Nippon India MF participated in the anchor round.
Gurugram-based Delhivery is the largest and fastest-growing fully-integrated logistics services player in India by revenue as of FY21. The company has built a nationwide network, servicing 17,045 PIN codes in the six-month ended June 30, 2021, or 88.3% of the 19,300 PIN codes in India. For the nine months ended December 2021, the company reported revenue of Rs 4,911 crore, while the net loss stood at Rs 891.14 crore during the period.