Delhivery IPO: The maiden public issue of logistics firm Delhivery Limited was subscribed 21 per cent on the first day of its opening, thus receiving a muted response from bidders. The Delhivery IPO opened for subscription on Wednesday, May 11, and will close on Friday, May 15, after three days of bidding. The company aims to raise Rs 5,235 crore from its maiden offer, but has received a muted response so far. The Delhivery IPO is the second biggest for Dalal Street in calendar year 2022 (CY22) after LIC.
Delhivery IPO Subscription Status
As mentioned above, as of Day 1 of opening, the Delhivery IPO was subscribed 21 per cent, meaning that investors bid for 13.2 million shares against the issue size of 62.5 shares. The portion set aside for Qualified Institutional Bidders was subscribed 29 per cent, while retail investors bid for 30 per cent of the shares reserved for them. The quota set aside for non-institutional investors and employees was booked only 1 per cent and 6 per cent respectively, indicating a muted response.
Delhivery IPO GMP Today
The unlisted shares of Delhivery IPO were fetching a premium of Rs 2 today, as per market observers. The Delhivery IPO GMP today was Rs 2, which means at the upper end of the price band, the shares are expected to list at Rs 489.
Delhivery IPO Issue Size and Price Band
The Delhivery IPO size is around Rs 5,235 crore, consisting of a fresh issue of Rs 4,000 crore, and Offer for Sale of Rs 1,235 crore. The Delhivery IPO price band gas been fixed at Rs 462 to Rs 487 per equity share.
Delhivery IPO: Objectives of Offer
Delhivery plans to utilise the funds raised from its initial public offering for organic growth initiatives. It will also allocate money for inorganic growth through acquisitions and strategic initiatives and for general corporate purposes.
Delhivery IPO: Company Details
Delhivery Limited is the largest and fastest growing fully-integrated logistics player in India by revenue as of Fiscal 2021, which has been exclusively commissioned and paid for by it in connection with the Offer. It provides a full-range of logistics services, including express parcel and heavy goods delivery, part truckload freight (“PTL”), truckload freight (“TL”), warehousing, supply chain solutions, cross border express and freight services and supply chain software, along with value added services, such as e-commerce return services, payment collection and processing, installation and assembly services and fraud detection.
Should You Buy?
Hem Securities: The company is bringing the issue at price band of Rs 462-487 per share at ev/sales multiple of approx. 5x. Company has been showing rapid growth and extensive scale with its proprietary logistics operating system and Vast data intelligence capabilities. The company’s network design and engineering with integrated portfolio of logistics services and strong relationships with a diverse customer base is looking strong. Also, the company’s extensive ecosystem of partners, enabling an asset-light business model and extended reach. Looking after current financials, we recommend “Avoid” for short term while only long term investors can “Subscribe” issue.
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