Logistics services provider Delhivery is likely to launch its downsized initial public offering (IPO) next week, Business Standard said in a report. The Softbank-backed firm may trim its issue size from ₹7,460 crore to ₹5,500 crore to align with the volatile market conditions, sources told the market daily.
Sources added that the fresh issue component of the IPO could be reduced to ₹4,500 crore and the OFS component to ₹1,000 crore. The company intends to wrap its IPO before May 15, failing which it will have to update its offer document with the latest financial numbers, the report noted.
Recently, the state-owned insurance giant LIC had also downsized its IPO size to just ₹21,000 crore from its earlier estimated size of ₹60,000 crore.
The report quoted Industry players saying that the recent IPOs of Campus Activewear and Rainbow Children's Medicare were well-received by investors, which has given investment bankers the confidence to Delhivery’s IPO close on heels with LIC.
According to its draft red herring prospectus (DRHP) filed with market regulator Sebi in November, Delhivery intended to raise ₹5,000 crore in fresh capital — half of which was to fund organic growth initiatives and about ₹1,250 crore was earmarked for inorganic growth opportunities, noted BS. The IPO also had an offer for sale (OFS) component of ₹2,460 crore.
Delhivery’s IPO will be the second biggest this year after LIC and among the top five since 2021. According to its DRHP, the company is India’s largest and fastest-growing fully integrated logistics player by revenue as of FY21.
"In the run-up to its IPO, Delhivery had strengthened its board by appointing industry veterans such as Kalpana Morparia, previously the chairman of JP Morgan, Romesh Sobti, former CEO and managing director of Indusind Bank, and Saugata Gupta, CEO and managing director of Marico, as independent directors," added the report.
The Gurugram-based firm is seen as a proxy to play the fast-growing e-commerce theme. It provides a full-stack range of logistics services including warehousing and supply chain software. The firm also provides value-added services such as e-commerce return services, payment collections, and installation services. Delhivery is also India’s fastest-growing third-party express parcel delivery player in India.
Delhivery’s shipment volume stood at 28.9 crore orders in FY21. The firm’s revenues have grown from ₹1,654 crore in FY19 to ₹3,646 crore in FY21 at a compounded annual growth rate of 48.5 percent, stated BS.
In a pre-IPO note, Motilal Oswal had said the domestic logistics sector offers a large addressable opportunity as it is pegged to grow at an annualised rate of 9 percent to $365 billion between FY20 and FY26. The domestic brokerage expects organised players to clock higher growth due to their focus on technology and automation.
