Delhivery shares close 10% higher, a boost to upcoming IPOs

SoftBank-backed Delhivery Ltd debuted on the Indian stock exchanges with an over 1% opening but closed at a 10% premium to the issue price, taking the firm's market capitalisation at Rs 38,900 crore ($5 billion). 

The Gurugram-based logistics player’s shares closed at Rs 537.25 per share on BSE. 

The buoyant closing could come as a breather for investors and the startups queued up for upcoming IPOs such as PharmEasy, Ola, OYO, Snapdeal and others. 

Delhivery's public issue was trimmed by 30% at Rs 5,235 crore with a fresh issue comprises Rs 4,000 crore. It was the first major public listing after the LIC’s subdued IPO a week earlier. 

Amid volatile market conditions, the IPO was launched on May 11 and was subscribed 1.63 times earlier this month at an offer price set at Rs 487 apiece (at which shares were offered to the investors).

On Tuesday, the shares of Delhivery were listed at Rs 493 per share, 1.2% higher than the issue price. On the NSE, the shares listed at a 1.7% premium at Rs 495.2 a piece. 

In the afternoon trade, it touched a high of Rs 568.90 per share, a premium of 16.8%, despite the discouraging grey market sentiments where shares of Delhivery are available at a Rs 5 discount to the issue price.

As part of the IPO's offer for sale (OFS) which was reduced to Rs 1,235 crore ($162 million), investors including SoftBank, Carlyle, Fosun and Times Internet divested their stake.

SoftBank which first invested around $400 million in Delhivery in 2019, now holds 18.51% stake valued at over Rs 7,200 crore (around $1 billion), more than double the value of its three-year old bet.

Meanwhile Carlyle’s stake was reduced to 5.08% stake valued at Rs 1977.5 crore ($255 million) and Times Internet owns 3.91% shareholding worth Rs 1,521 crore ($196 million).

Fosun almost fully exited garnering almost over Rs 200 crore and continues to hold less than 1% in Delhivery.

Delhivery had raised Rs 2,347 crore from 64 anchor investors including private equity players Tiger Global Management, Steadview Capital, Bay Capital and Singaporean wealth funds Government of Singapore (GIC), Monetary Authority of Singapore. 

Delhivery was founded in 2011 by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan, and Kapil Bharati as a hyperlocal express logistics services firm. It became a unicorn touching $1 billion valuation, in 2019.  

The decade-old company provides a full suite of logistics services and supply chain solutions to 21,342 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and small businesses across several verticals like fast-moving consumer goods, consumer durables, etc. 

Delhivery counts SoftBank Vision Fund, Nexus Venture Partners, Carlyle Asia Partners and Canada Pension Plan Investment Board (CPPIB) as some of its key shareholders.

It had filed for the IPO in November. The fundraising will be utilized towards funding organic growth initiatives, funding inorganic growth through acquisitions and other strategic initiatives, and for general corporate purposes, Delhivery’s senior management had said. 

As its gains scale in India, Delhivery is looking to develop capabilities relevant to other markets and international growth will be focused on using logistics stack and logistics SAAS model.  

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