Delhivery’s Journey towards a Potential $1 Billion Initial Public Offering

One of India’s leading logistics firms Delhivery has filed its DRHP with market regulator SEBI in early November for its Rs. 7,460 crores ($997.33 million) IPO. It is one of the latest start-ups of the country to join the IPO frenzy.

But the journey so far for the new-age logistics and the delivery firm wasn’t smooth. Let’s find out more about Delhivery’s road to its massive $1 billion initial public offerings.

The Beginning of Delhivery

Sahil Barua, Suraj Saharan, and Mohit Tandon left their jobs at Bain & Co. in 2011 with the aim to launch a third-party logistics company. They managed to convince Bhavesh Manglani and Kapil Bharati to join their team. Bhavesh Manglani worked at Reliance at that time, while Kapil Bharati was the founder of two companies.

SSN Capital, which is the parent firm of Delhivery, became a reality on 5 April 2011 with an authorised share capital of Rs. 1 lakh. For the first year, the founders had to put in funds from their own pockets. After that, angel investor Abhishek Goyal provided around Rs. 60 lakhs which helped the company to run for one more year.

Delhivery Picks Up Pace

With time, Delhivery gathered momentum and began to attract numerous investors. It received funds from notable marquee investors like SoftBank, FedEx, Carlyle, and more. After a decade, the logistics firm is headed for its IPO of Rs. 7,460 crores with a valuation of around $5.5 billion.

As per the DRHP, Barua single-handedly owns shares worth Rs. 1,296 crores. The four founders (except Manglani, who quit in December 2020) collectively own a stake of Rs. 3,176.7 crores.

Propelled by significant funding from private equity investors and venture capitalists, Delhivery entered the unicorn club in 2019. It bagged a whopping $395 million from SoftBank, which pushed its valuation to $1.5 billion.

Apart from organic growth, Delhivery has also worked on its inorganic growth. It has recently acquired Spoton Logistics Pvt. Ltd. As per RedSeer Report, this company is the fastest growing and the largest integrated logistics player in the nation in terms of revenue as of FY21.

About Delhivery’s Operations

The logistics firm has 12,665 permanent employees and 27,313 contractual employees as of June 2021. To provide last-mile services, the company also hires temporary workers. It had 26,370 temporary workers as of June 2021. In addition, the firm also comes with 71 fulfilment centres, 21 automate sort facilities, more than 1,100 constellation centres and 2,235 self-managed facilities.

As of 30 June 2021, the Rated Automated Sort Capacity of the company stands at 3.17 million shipments each day. This has been further improved to 3.98 million per day by 30 September 2021. It has automated material handling systems installed at Bhiwandi, Bengaluru and Tauru.

An Overview of Delhivery IPO

The IPO of Delhivery will consist of both an offer for sale by existing shareholders and the issuance of fresh equity shares.

Delhivery IPO will comprise an OFS of shares worth Rs. 2,460 crores and the issue of fresh shares worth Rs. 5,000 crores. All founders would not participate in the offer for sale of shares. Sahil Barua has decided not to sell his stake. However, Tandon, who holds a 1.88% stake, would offload shares worth Rs. 40 crores. Saharan would sell off stakes worth Rs. 6 crores, while Bharati would offer shares of Rs. 14 crores.

The delivery giant will be using the proceeds from its IPO for funding both organic and inorganic growth. It has earmarked Rs. 2,500 crores for organic growth, while Rs. 1,250 crores will be used for inorganic growth via strategic initiatives and acquisitions.

Bottom Line

Similar to many start-ups, Delhivery had its own share of struggle. Its journey wasn’t simple at all. Barua states that one of the most challenging tasks in the early days was to convince investors that a third-party logistics player has a scope to thrive in the Indian market.

Delhivery is yet to publish further details about its initial public offering. To get more updates about IPOs, stock market, and investment, check out Angel One blogs.

Frequently Asked Questions

1. Who are the lead managers of Delhivery IPO?

Morgan Stanley India, Kotak Mahindra, Citigroup, and BofA Securities have been appointed as the book running lead managers.

2. When is the opening date for Delhivery IPO?

The dates are yet to be finalised.

3. Where will Delhivery IPO be listed?

Delhivery IPO will be listed on both NSE and the BSE.