Delhivery sets IPO price band at Rs 462-487: Proceeds to be used to fund growth

The issue, aimed at raising up to Rs 5,235 crore, opens on May 11

The IPO will open for subscription on May 11.
The IPO will open for subscription on May 11.

Logistics services player Delhivery will price its shares in a band of Rs 462-487 for its forthcoming initial public offering (IPO) aimed at raising up to Rs 5,235 crore. At the upper end of the price band, the company will be valued at Rs 35,284 crore, Delhivery said at a virtual press conference. The IPO will open for subscription on May 11.

The Gurugram-headquartered company has pruned the IPO size by about 30% to Rs 5,235 crore, from Rs 7,460 crore earlier, opting to play it safe after the Rs 21,000-crore IPO of Life Insurance Corporation (LIC). The offer for sale (OFS) component will be worth Rs 1,235 crore while the public issue now comprises shares worth Rs 4,000 crore. Private equity (PE) investors Carlyle Group and SoftBank as also the co-founders of the company will be selling shares.

CA Swift Investments, an entity of Carlyle Group, will sell shares worth Rs 454 crore while SVF Doorbell (Cayman) Ltd, an arm of Softbank Group, will offload  shares worth Rs 365 crore. Delhivery’s co-founders – Kapil Bharati, Mohit Tandon and Suraj Saharan – will sell shares worth Rs 5 crore, Rs 40 crore and Rs 6 crore, respectively.

Currently, SoftBank has a stake of 22.78% while Carlyle owns 7.42%. Bharti owns 1.11%, Tondon has 1.88% and Saharan holds  a 1.79% stake.

The company said 75% of the issue has been reserved for qualified institutional investors, 15% for non-institutional investors and the remaining 10% for retail investors. In addition, the company has set aside shares worth Rs 20 crore for eligible employees, who will get a discount of Rs 25 per equity stock during the bidding process.
Investors can bid for a minimum of 30 equity shares and in multiples thereof.

Delhivery reported a loss of Rs 891. 1 crore for the nine months to December, 2021, compared with a loss of Rs 297.5 crore in the corresponding period of 2020. The company reported a loss of Rs 415.7 crore in FY21. The company’s total income for the nine months to December, 2021 stood at Rs 4,911.4 crore, compared with Rs 2,806.5 crore in the year-ago period. Total expenses rose to Rs 5,810.2 crore from Rs 3,062.7 crore with freight handling and servicing costs shooting up.

With several IPOs of start-ups faring poorly after listing, Sebi had in mid-February initiated a discussion on disclosures put out by them to explain the basis of the pricing. The regulator proposed that in addition to the financial parameters, new-age technology companies should disclose some details of KPIs (key performance indicators). To ensure the data is authentic, the regulator wants it should be audited.

Delhivery provides an end-to-end logistics solution, including warehousing services and a range of value-added services.

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