Supply chain tech platform, Delhivery is aiming to be profitable in next few quarters after posting a substantial decline in its losses from FY19 to nine months ended FY22 despite the COVID induced lockdowns bringing logistics industry to a halt. Delhivery on the other hand has leveraged the acceleration in e-commerce industry growth.
E-commerce deliveries constitute over 60 per cent of Delhivery’s business currently, as per the details in the Delhivery’s Draft Red Herring Prospectus. The management said on Thursday that the company has been able to break even for the last two quarters of FY22. The metrics show that Delhivery could be the first new-age tech company with a realistic profitability goal compared to its counterparts. Sandeep Barasia, Chief Business Officer and Managing Director at Delhivery said that the growth and profitability should not be challenge for the company going forward. The logistics firm has touched Rs 5,170 crore revenue milestone in nine months ended FY22 .
The company plans to open its initial public offering on May 11, 2022. The anchor investor bid/offer period is one working day prior to bid/offer opening date, that is, May 10, 2022.
Notably, the Indian tech firm stocks have seen a slump post the poor show of Paytm’s IPO which experts believe could be due to the ambiguity over the path to profitability of some of these companies. The global market conditions have also cast their impact on tech share prices in other geographies.
In response to a question related to the reduction in IPO size from earlier proposed Rs 7,460 crore to Rs 5,235 crore, the Delhivery’s management said that the secondary share sale in the Offer for sale (OFS) portion of the company was reduced because some of the existent investors did not want to sell stake at an attractive valuation. The company is expecting a valuation of over Rs 35,000 crore (over $5 billion) post the listing. The primary share sale comprises Rs 4,000 crore whereas the OFS portion is Rs 1,170 crore.
Meanwhile, Barasia said that Delhivery is focussed on asset light, data centric model and is leasing 0.5 million square feet of warehousing hubs which are leased out and out of 8,000 trucks operations, the company owns just 300 trucks. “We still have a 0.5 per cent market share of addressable $300 billion logistics industry in India and hence we will focus on scaling our core operations and grow both organically as well as inorganically,” he added.
The price band of the offer has been fixed at Rs 462 per share to Rs 487 per share of face of Re 1 each. The Offer includes an Employee Discount of Rs 25 per share on the offer price. Bids can be made for a minimum of 30 shares and in multiples of 30 shares thereafter.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today