Delhivery is a New-age delivery and logistics company. The company’s business provides service to e-commerce marketplaces, enterprises & SMEs, direct-to-consumer e-tailers, lifestyle, consumer durables, FMCG, retail, automotive, consumer electronics, and manufacturing. As of March 2021, Delhivery carries out the delivery of nearly 2.3 million orders per day. It includes cargo delivery of around 3600 tons to mor than 18,500 pin codes. The company has established a wide distribution network that caters to around 2,700 cities, towns, and villages. Delhivery also holds a network of 7,000 drivers with a fleet size of 5,000 trucks. The Delhivery business operational model is a B2B type model. Through it, the company facilitates services with high penetration to the businesses. Let’s delve deep into understanding some key elements about the Delhivery IPO.
The services of the company can be divided into three major segments, these are:
- Warehousing
- Transportation
- E-Commerce
Currently, the company has 20 completely and semi-automated sortation centers and 86 gateways. It helps the company to carry out a rated automated sorting ability of 3.17 million shipments every day. Their gateways facility is present in Bengaluru, Bhiwandi, and Tauru. The company also has an automatic material processing system in Karnataka.
OBJECTS OF THE DELHIVERY IPO ISSUE:
- Prepayment of all the company’s loans, which be availed on a consolidated basis.
- To meet corporate targets.
- To fund the working capital requirement.
BASIS OF THE OFFER:
- Delhivery has carried out a rapid expansion on a very broad scale that has helped the company improve its unit economics.
- The company has an excellent in-house logistics support and management system, which has helped the company to attain an efficient business model.
- Delhivery holds the capability for large-scale database management and intelligence.
- The company has a well-established network design and engineering.
- The company has a comprehensive logistical support and services portfolio.
- Delhivery holds a strong customer relationship with a diversified and wide client base.
- It has a large ecosystem of partners. It allows Delhivery to operate on a low-asset company model.
- The company has a team of professionals that are widely present in all departments, including management, operation, support systems, and other wings.
DELHIVERY IPO DETAILS:
Delhivery Limited, a company engaged in the logistics sector, has its headquarters in Delhi. The company filed its DRHP with the SEBI and got SEBI approval to float their IPO in the market from the SEBI. The IPO brought forward by the company as per their DRHP is a combination of fresh equity issues worth Rs. Five thousand crores and an OFS been brought forward by the promoters and the selling stakeholders of Rs. 1235 crores. The total IPO size of the company is Rs.5235 crores. The company stated that it would not carry out any pre-IPO placement.
Through the OFS of the company, Carlyle and SoftBank Vision Fund will offload their stake in the company. In addition, the Times Internet, another investor in the company, will also participate through the OFS of the company. Delhivery was founded by Kapil Bharati, Mohit Tandon, and Suraj Saharan. The stakeholders offloading their stake are as follows:
| Carlyle | Rs. 454 crores |
| SoftBank | Rs. 365 crores |
| Fosun | Rs. 200 crores |
| Times Internet | Rs. 165 crores |
The company stated that the funds been raised from the issue of the fresh equity will be used for:
| Organic Growth Objectives | Rs. 2,500 crores |
| Inorganic Growth Initiatives involving strategic acquisitions | Rs. 1,250 crores |
| General Corporate Purpose | Rs. 1,250 crores |
| IPO Opening Date | May 11, 2022 |
| IPO Closing Date | May 13, 2022 |
| Issue Type | Book Building Type Issue IPO |
| IPO Size | Rs. 5,235 Crores |
| Face Value | Rs. 1 per equity share |
| IPO Price | Rs. 462 – Rs 487 per equity share |
| Market Lot | One lot of 30 equity shares of the company |
| Issue of fresh equity of worth | Rs. 4,000 Crores |
| OFS sale price amount | Rs. 1,235 Crores |
| Minimum Order Quantity | One lot of 30 equity shares of the company |
| Minimum Order Price | Rs. 14,610 |
| Maximum Order Quantity | 13 lots corresponding to of 390 equity shares of the company |
| Maximum Order Price | Rs. 189,930 |
| Listing At | BSE, NSE |
| Issue Size | Rs. 7460 Crores |
| Fresh Issue | Rs. 5000 Crores |
| Offer for Sale | Rs. 2460 Crores |
| Basis of Allotment Date | May 19, 2022 |
| Initiation of Refunds | May 20, 2022 |
| The Credit of Shares to Demat Account | May 23, 2022 |
| IPO Listing Date | May 24, 2022 |
| Basis of Allotment Type | % Of the allotment from the IPO Offer |
| Employee Discount | Rs. 25 per equity share of the company |
| Qualified Institutional Buyer | 75 |
| Non- Institutional Investor | 15 |
| Retail | 10 |
STRENGTHS AND GROWTH ASPECTS OF DELHIVERY IPO:
- Delhivery Limited is the country’s fastest-growing, biggest, and rapidly network expanding company that provides logistics services.
- Despite the COVID-19 pandemic, the company was among the few start-ups which have been able to sustain their financial performance and operational efficiency due to an increase in the demand and a better business outlook for the company.
- The company’s growth has been tremendous in the past as Delhivery initially was started as a tiny business with constrained reach in a city only. Now it has expanded its business operation on a Pan India presence. The company aims to increase its fleet size to meet the demand rise amidst the COVID-19 pandemic.
- Delhivery will be the greatest beneficiary, as per the Redseer report. The Indian logistics market is considered to grow to $365 billion with a CAGR of 9.1% till FY26.
- Delhivery has, till now, conducted 9 funding rounds successfully. The company has been able to raise a fund of $934.5 million. It shows the amount of faith the investors have in the company’s operational business model and future aspect.
- Delhivery is one of the largest and most established independent start-ups engaged in logistics.
- The company is heavily carrying out new investments and strategic acquisitions. It includes investment in Falcon Autotech, acquisition of Spoton Logistics, and acquisition of Transition Robotics Inc. for drone technology.
Apply For Delhivery IPO with Zerodha
WEAKNESS AND THREATS OF DELHIVERY IPO:
- Delhivery relies completely on its operations in the field of commercial, automated, and an establishment of a unified network infrastructure. This accounts for a major part of their logistics and transportation business operation.
- The company is vulnerable to any delay associated with the logistics and transportation infrastructure. It can lead to a negative impact on the company upfront on operations and financial performance.
- Heightened risk of the inefficiency of their Third-party business operation can lead to a large impact on the operational and financial performance of the company.
- The company also has high reliability on their E-Commerce customer base. It accounts for around 78% of their business revenue.
- Delhivery is engaged in a business that is highly fragmented along with fierce competition from many organized as well as unorganized business players. Any news that could hurt the company’s sentiment will lead to a shift in its market share.
- Delhivery’s large amount of revenue is from large clients. The retention of these clients and the addition of the other clients that contribute majorly to their revenue is a challenge for the company.
- The company operates in a business segment where it has been subject to many kinds of guidelines, regulations, and rules for the operation of the company’s business.
- Delhivery is also subject to attack on their Database Management system, IT support system, and Logistics and transport division inefficiency as their major challenges.
- Like all sectors, the COVID-19 pandemic has impacted the E-commerce sector; However, there is a buzz of a growing trend of E-commerce. Still, the imbalance in supply and demand has created a significant impact on the company’s business operation.
- Delhivery’s logistics premises are on the lease, and some discrepancy issues. Any negative news upfront on this aspect will lead to a detrimental impact on the company’s image.
FINANCIAL TRENDS OF DELHIVERY IPO:
| Particulars | For the year with amount ending in Crores | |||
| 30-Jun-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |
| Total Assets | 6,582.19 | 4,597.80 | 4,357.31 | 4,062.54 |
| Total Revenue | 1,364.01 | 3,838.29 | 2,988.63 | 1,694.87 |
| Loss After Tax | 129.58 | 415.74 | 268.93 | 1,783.30 |
| PARAMETER | MARCH 21 | MARCH 20 | YoY % |
| Earnings Per Share (Rs) | -2545.88 | -2758.22 | 7.70 |
| CEPS(Rs) | -374.30 | -136.77 | -173.67 |
| Book NAV/Share (Rs) | 15955.75 | 30735.74 | -48.09 |
| Core EBITDA Margin (%) | -3.37 | -6.19 | 45.52 |
| EBIT Margin (%) | -8.97 | -7.90 | -13.59 |
| Pre-Tax Margin (%) | -11.40 | -9.67 | -17.94 |
| PAT Margin (%) | -11.40 | -9.67 | -17.88 |
| Cash Profit Margin (%) | -1.68 | -0.48 | -249.52 |
| ROA (%) | -9.29 | -6.66 | -39.34 |
| ROE (%) | -14.84 | -8.57 | -73.12 |
| ROCE (%) | -9.96 | -6.36 | -56.67 |
| Asset Turnover(x) | 0.81 | 0.69 | 18.20 |
| Sales/Fixed Asset(x) | 2.27 | 3.28 | -30.90 |
| Working Capital/Sales(x) | 1.94 | 1.47 | 32.02 |
| Fixed Capital/Sales(x) | 0.44 | 0.30 | 44.71 |
| Receivable days | 59.85 | 53.56 | 11.76 |
| Inventory Days | 2.19 | 2.66 | -17.49 |
| EV/Net Sales(x) | 0.02 | -0.04 | 141.58 |
| EV/Core EBITDA(x) | 0.89 | -3.10 | 128.53 |
| EV/EBIT(x) | -0.19 | 0.51 | -136.61 |
| EV/CE(x) | 0.01 | -0.03 | 151.68 |
| Net Sales Growth (%) | 31.14 | 68.12 | -54.28 |
| Core EBITDA Growth (%) | 91.17 | 102.17 | -10.77 |
| EBIT Growth (%) | -48.97 | 87.48 | -155.98 |
| PAT Growth (%) | -54.59 | 84.83 | -164.36 |
| EPS Growth (%) | 7.70 | 85.09 | -90.95 |
| Total Debt/Equity(x) | 0.11 | 0.08 | 34.87 |
| Current Ratio(x) | 2.97 | 3.77 | -21.17 |
| Quick Ratio(x) | 2.94 | 3.74 | -21.35 |
| Interest Cover(x) | -3.69 | -4.46 | 17.27 |
PRINCIPAL SHAREHOLDERS’S HOLDING:
| Pre-Issue Share Holding | 15% |
| Post Issue Share Holding |
CONTACT DETAILS:
Delhivery Limited
N24-N34, S24-S34, Air Cargo Logistics Centre-II,
Opposite Gate 6 Cargo Terminal,
Indira Gandhi International Airport,
New Delhi 110037 Delhi, India
Tel: +91 124 6225602
E-mail: cscompliance@delhivery.com
Website: www.delhivery.com
REGISTRAR:
Link Intime India Private Limited
C 101, 247 Park, L.B.S. Marg, Vikhroli (West),
Mumbai 400 083
Maharashtra, India
Tel: +91 22 4918 6200
E-mail: delhivery.ipo@linkintime.co.in
Website: www.linkintime.co.in
LEAD MANAGER(S)
- Kotak Mahindra Capital Company Limited
- Morgan Stanley India Company Private Limited
- BofA Securities India Limited
- Citigroup Global Markets India Private Limited
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