Shares of supply chain company Delhivery are likely to hit the D-street on Tuesday, May 24. The public issue worth Rs 5,235 crore is the first major IPO that is being listed after LIC IPO. Delhivery was started in June, 2011, Delhivery is the largest and fastest-growing fully-integrated logistics services player in India by revenue as of fiscal 2021. It operates a pan-India network and provides its services in 17,488 postal index number codes, as of December 31, 2021.
It provided supply chain solutions to a diverse base of 23,113 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers, and enterprises and SMEs across several verticals. Around 64 per cent of the revenue created by the company was from loyal customers that have been transacting for three years.
Delhivery IPO: Subscription Status
Delhivery IPO was subscribed 1.63 times on the final day of subscription which ended May 13. According to the NSE data, the offer received bids for 10,17,04,080 shares against 6,25,41,023 shares on offer, on the last day of subscription. Qualified institutional buyers portion attracted 2.66 times subscription, while the category for retail individual investors was subscribed 57 per cent and that for non-institutional investors 30 per cent.
Delhivery IPO: GMP Today
Market experts have said that gray market sentiments are not encouraging for the public issue. As per the market observers, shares of Delhivery are available at a discount of Rs 5. According to market observers, Delhivery IPO gray market premium (GMP) today is minus Rs 5 which means the gray market is expecting that Delhivery IPO listing would be around Rs 482 (Rs 487 – Rs 5), which is also signaling a weak listing of the public issue worth Rs 5,235 crore.
Delhivery IPO: Financials
Delhivery has never reported a profit, according to its share-sale prospectus. The company made a loss of Rs 891.14 crore for the nine months ended December 2021 and posted a Rs 415.7 crore loss in FY21. Revenue was Rs 4,911 crore in the nine months ended December and Rs 3,838 crore in FY21. It reported a negative free cash flow of Rs 246 crore in FY21 versus Rs 848 crore in FY20. Freight, handling, and servicing costs rose to Rs 3,480 crore in the first nine months of FY22 from Rs 2,026 crore in FY21.
Delhivery IPO: What Do Experts Say About Listing Gains?
Ravi Singh, Vice President & Head of Research at Share India said, “Delivery IPO has poor financials so far and the valuations of the company is expensive as well. Owing to low response by retail investors and negative market sentiments, Delhivery IPO may list at a discount price on listing day.”
Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares, told News18.com that “The IPO of Delhivery got a low-spirited response from Investors. However, the issue sailed on backing of QIB investors subscription. The company has posted robust revenue growth but losses too have increased in similar fashion which made investors wary. Expensive Valuations & Unsupportive market conditions may dampen the listing. The IPO may list at par around the issue price.”
The Delhivery IPO opened on May 11 and closed on May 13. The Delhivery IPO is expected to list at the bourses on May 24, Monday. The public issue will list on both NSE and BSE.
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