Supply chain company Delhivery has fixed a price band of ₹462-487 a share for its ₹5,235-crore initial public offering (IPO), which will open for subscription on May 11. Addressing an online press conference on Thursday, Delhivery’s Chief Business Officer Sandip Basaria said that the company is well positioned to gain from current economic trends. “The tailwinds that India is experiencing, such as development of highways, digitization, on-line commerce, the shift from unorganised to organised sector, all affect our company positively as well. We have grown at the rate of 49% over the past four year.”
The public issue comprises fresh issuance of equity shares worth ₹4,000 crore and an offer for sale (OFS) component of ₹1,235 crore by existing shareholders. Under the OFS, investors Carlyle Group and SoftBank as well as Delhivery’s co-founders will divest their shareholding in the logistics company. CA Swift Investments, an entity of Carlyle Group, will sell shares to the tune of ₹454 crores while SVF Doorbell (Cayman) Ltd, an arm of Softbank Group, will offload shares worth ₹365 crore. Deli CMF Pvt Ltd, a wholly-owned subsidiary of private equity fund China Momentum Fund, L.P. will sell shares worth ₹200 crores and Times Internet will offload shares worth ₹165 crores. In addition, Delhivery’s co-founders — Kapil Bharati, Mohit Tandon and Suraj Saharan — will sell shares worth ₹5 crore, ₹40 crores, and ₹6 crores, respectively.
Speaking at the press conference, Chief technology Officer Kapil Bharati said that one of Delhivery’s major strengths is that it has developed its own technology platform. “We have built our technology in-house, every line of code is written by our own programmers. Our technology platform is our competitive advantage,” he said.
Delhivery is a fairly asset-light organisation and leases most of its trucks and office space. As an e-commerce logistics company operates a pan-India network and provides services in 17,045 (PIN) codes, from the Andaman Islands in the East to Kutch in the West. Addressing the press conference, Chief Financial Officer Amit Agarwal said that Delhivery is on its way to profitability and is close to breaking even in terms of EBITA.”
According to the IPO prospectus, proceeds of Delhivery’s issue will be used towards funding organic growth initiatives, inorganic growth through acquisitions and other strategic initiatives, and for general corporate purposes. The company’s last acquisition was Spoton, which went a long way in helping it achieve scale. “After successfully integrating Spoton’s operations, we now have the capability to execute acquisitions. In the future, we will focus on acquisitions that help us build scale since that is crucial to reducing costs in the logistics business,” he said.