CA Swift Investments Sells Delhivery Shares Worth INR 607 Cr, Morgan Stanley A Buyer

CA Swift Investments, one of Delhivery’s major pre-IPO shareholders, sold 2.5% of its stake or 18 Mn shares worth INR 607 Cr in the open market in a bulk deal on Monday (November 21) on the expiry of the lock-in period for the pre-IPO investors of the logistics unicorn. 

CA Swift Investments held a 5.07% stake in Delhivery with 36.8 Mn shares. After today’s stake sale, the Mauritius-based firm is estimated to hold a 2.37% stake in the startup.

On the other hand, Morgan Stanley Asia purchased 4.8 Mn shares of Delhivery at INR 330 apiece in a separate bulk deal.

Delhivery shares touched a new record low of INR 340.3 today and a record 20 Mn shares were traded as over 500 Mn shares of its pre-IPO shareholders were released from the lock-in.

The expiry of the lock-in can lead to sell-offs by other pre-IPO investors as well. Some of its major pre-IPO investors include Canada Pension Plan Investment Board, SoftBank, Tiger Global, Times Internet, Alpha Wave Ventures, and Fedex. 

Other new-age tech stocks like Nykaa, Paytm and Zomato also saw a sell-off following the expiry of their lock-in period. While the lock-in period for Nykaa and Paytm expired earlier this year, Zomato’s lock-in ended in July. 

Nykaa’s shareholders have been dumping stocks even two weeks after the lock-in expiry. As per reports, Lighthouse might further offload its stake in Nykaa by selling shares worth INR 335 Cr via block deals. 

Moreover, the global macroeconomic volatility has also turned investor sentiment negative in recent times, specially around tech stocks. 

Delhivery hit its previous record low last month, following a muted Q2 FY23 performance update.

Delhivery reported a 60% year-on-year decline in its net loss at INR 254.1 Cr in Q2 FY23, while total income surged 23% to INR 1,883.3 Cr during the quarter.

Despite the ongoing volatility in the shares of Delhivery and in the overall new-age tech landscape, many brokerages are bullish on the logistics major.

ICICI Securities upgraded Delhivery to ‘buy’ from a ‘sell’ rating on Monday while cutting its price target to INR 460 from INR 477, implying an upside of over 33% to the stocks’ last close.  

The brokerage said, “While we acknowledge growth has been slowing in ecommerce sales in FY23, we believe it is a transient issue and is unlikely to be symptomatic of structural weakness in the space.”

The brokerage also called Delhivery’s current price a great opportunity to buy the “high-quality stock”. 

Brokerage CLSA also upgraded Delhivery to ‘buy’ last week.

Delhivery shares ended Monday’s session 1.7% lower at INR 345.25.