India's Delhivery completes $674m IPO
Indian e-commerce logistics provider Delhivery raised INR 52.4bn (USD 674m) in a domestic IPO but was unable to sustain first-day price gains with the stock sliding towards the offering price by May 26.
The company sold 107.5m shares for INR 486 apiece, according to a prospectus. It had set out to raise as much as INR 74.6bn, but the new and existing share tranches were both scaled back – from INR 50bn and INR 24.6bn to INR 40bn and INR 12.4bn. The Carlyle Group and SoftBank Vision Fund realised proceeds of INR 4.55bn and INR 3.65bn, respectively. Fosun Group and Times Internet also made partial exits.
The stock ended May 24, its first day of trading, on INR 537, having touched INR 568 in the early afternoon. As of mid-afternoon trading on May 26, it had fallen to INR 498.
This is not an isolated incident among the pre-profit Indian technology companies that have completed domestic listings to much fanfare in the past 12 months. The BSE Sensex Index has seen two peaks and two troughs since the start of the year. Zomato, the first to go public, is trading at a 21% discount to its IPO price. The discounts for Paytm and PolicyBazaar are 72%, and 33%. In contrast, Nykaa is up 22%.
Delhivery claims to be India’s largest and fastest-growing fully-integrated logistics services player based on revenue for the 2021 financial year, with a 20% share of the e-commerce parcel market. Areas of coverage include express parcel delivery and express air, partial-truckload (PTL) and full-truckload (FTL) transportation, cross-border shipments, B2B and B2C warehousing, and third-party logistics (3PL).
More than 1bn express parcels have been shipped to date, as well as 845,000 tons of PTL freight. The company has more than 21,300 active customers, including e-commerce marketplaces, direct-to-consumer retailers, and businesses – of varying size – across the fast-moving consumer goods, electronics, lifestyle, automotive, and manufacturing industries.
Delhivery’s logistics network comprises 12.42m square feet of facilities that cover more than 17,000 pin codes. It operates 124 large logistics facilities, 20 automated sorting centres, 83 fulfilment centres, 35 collection points, 24 returns processing centres, 249 service centres, 120 intermediate processing centres, and 2,235 direct delivery centres. It also works with over 1,100 partner locations.
Income for the 12 months ended March 2021 was INR 38.4bn, up from INR 29.9bn the previous year. Over the same period, the net loss widened from INR 2.68bn to INR 4.16bn, largely driven by rising freight, handling, and servicing costs.
Prior to the IPO, SoftBank was the largest shareholder with 21.98%, followed by Nexus Venture Partners (8.91%), Carlyle (7.16%), Canada Pension Plan Investment Board (6.81%), Tiger Global Management (5.88%), Times Internet (4.92%), Addition (3.47%), FedEx Express (3.25%), Alpine Capital (2.67%), GIC (2.39%), and Alpha Wave Global (2.24%). The company raised over USD 1.4bn in private funding.
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