Delhivery files DRHP to raise Rs 7,460 Cr via IPO

Logistics and supply chain services company Delhivery has filed its draft red herring prospectus or DRHP with SEBI to raise Rs 7,460 crore through Initial Public Offering (IPO).

According to the DRHP, Delhivery Limited’s upcoming public offer constitutes a fresh issue of Rs 5,000 crore and an offer for sale (OFS) of Rs 2,460 crore. Delhivery’s backers Carlyle Group will offload shares worth Rs 920 crore, followed by Softbank which will be looking to raise Rs 750 crore by selling part of its own stake. 

Fosun International and Times Group will also participate in the OFS, selling shares worth Rs 400 crore and Rs 330 crore respectively.

Individual shareholders who are selling their holdings in the OFS include early backer Kapil Bharti who will offload shares worth Rs 14 crore and co-founders Mohit Tandon and Suraj Saharan who will liquidate shares worth Rs 40 crore and 6 crore respectively. 

Notably, other key members of the company namely Sahil Barua, Sandeep Kumar Barasia, Ajith Pai and Amit Agarwal are not participating in the OFS. The company has employed Kotak Mahindra Capital, Morgan Stanley, Bank Of America Securities and Citigroup Global Markets as the lead book-running managers for its IPO. 

As per the DRHP, the Softbank backed company intends to use Rs 2,500 crore to fund its organic growth initiatives including scaling up existing verticals along with the development of new adjacent business lines, expanding its network infrastructure with new warehouses and automated supply chain centers.  

Further, Delhivery will utilise around Rs 1,250 crore to make strategic investments in other entities and the remaining Rs 1,000 crore for general corporate purposes.

SoftBank is the largest stakeholder in Delhivery with 22.78% stake followed by Nexus Ventures Partners which controls 10.62%, as per the DRHP. Other notable investors include Carlyle Group, Canada Pension Plan Investment Board, Times Group and Tiger Global which hold 7.42%, 7.06%, 6.34% and 6.1% respectively. 
                                       

The above piechart represents the current holdings of all stakeholders but key managerial personnel including Barua, Saharan, Bharati, Barasia, Pai and Amit Agarwal have been granted stock options that will elevate their respective stakes, details below.

Delhivery Limited reported a 31% jump in its operating revenue of Rs 3,646.5 crore in FY21 from Rs 2,780.5 crore in the previous fiscal, according to the DRHP. During the period, its net losses surged from Rs 269 crore in FY20 to Rs 415.7 crore in FY21.

The company has also provided revenue and loss figures for the first quarter of the ongoing financial year i.e. Q1 FY22. Delhivery registered Rs 1,318 crore in revenue and Rs 129.6 crore total loss for the three months period (April-June).

Delhivery Limited is the parent entity that controls six subsidiaries, three in India namely Orion Supply Chain Pvt Ltd, Skynet Logistics Pvt Ltd and Delivery Freight Services Pvt Ltd. Foreign subsidiaries include Delhivery Corp Limited(United Kingdom)Delhivery  LLC( USA) and Delhivery HK Pte Ltd ( Hong Kong). 

Ahead of the IPO, Delhivery had also raised over $500 million across three rounds this year including $125 million led by Addition in September, $100 million led by FedEx Express in July and $277 million led by Fidelity in May. The company has raised $1.44 billion to date and was valued at around $3 billion as of May 2021.

Started as an e-commerce-focused logistic platform, Delhivery now provides a full range of logistics services, including express parcel delivery, heavy goods delivery, warehousing, and supply chain solutions. As of June 2020, the company claims to have 20 fully and semi-automated sortation centres and 86 gateways across India.