According to Brian Freitas, an analyst at Periscope Analytics, Delhivery is likely to be eligible to be added to the FTSE at the December quarterly index review (QIR)
Freitas also added that the stock will not get listed on the benchmark indices of BSE and NSE any time soon
Delhivery’s IPO will open for the public on May 11 and close on May 13, offering shares at INR 462-487 per share
IPO-bound Delhivery is likely to be added to the FTSE All-World Index by December this year and the MSCI India index by May 2023, according to Brain Freitas, an analyst at Periscope Analytics, a market research firm listed as a service provider on market research aggregator platform Smartkarma.
Freitas also said that the stock will not be added to the benchmark Sensex and Nifty indices of BSE and NSE, respectively, any time soon.
The FTSE All-World Index is a market-capitalisation weighted index representing the performance of large and mid-cap companies in developed and emerging markets. The index is derived from the FTSE Global Equity Index Series (GEIS), which covers over 7,400 securities in 47 different countries and captures 98% of the world’s investable market capitalisation.
“Listing after mid-May, the earliest that Delhivery will be eligible for inclusion in the FTSE indices is at the December quarterly index review (QIR) where data from November 11 will be used to compute the free float. To be included in the FTSE All-World index, Delhivery will need to have a market cap of $3.95 billion and an investable market cap of $463 million,” Brian was cited as saying by Business Standard.
“The earliest that Delhivery will have a decent shot at inclusion in the MSCI India Index is at the February 2023 QIR, though inclusion at the May 2023 SAIR has a higher probability,” he added.
However, Delhivery will not meet the threshold for a fast-track entry into FTSE and MSCI indices. For fast-track entry into the MSCI index, a company needs to have a full market cap of $8.71 Bn and a free-float market cap of $4.36 Bn. For FTSE, things are a bit more complicated than that, as it sets different rules for different geographies and stock cap sizes.
Delhivery’s IPO will open for the public on May 11 and close on May 13. The logistics major has set the price band for its initial public offering (IPO) at INR 462-487 per share. At the upper end of the price band, the unicorn will have a valuation of INR 35,283 Cr ($4.58 Bn).
Delhivery was founded in 2011 by Tandon, Sahil Barua, Bhavesh Manglani, Bharati and Saharan. It provides a full suite of logistics services such as parcel transportation, FTL (full truckload) and LTL (less than truckload) freight, reverse logistics, cross-border, B2B & B2C warehousing, and end-to-end supply chain services and technology services.
The startup last raised $125M in its Series I funding round led by VC firm Addition in September last year. It had previously raised $275 Mn in its Series H funding round in May 2021. In total, the startup has raised $1.4 Bn to date.
Delhivery filed its Draft Red Herring Proposal (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) in November last year. The startup then planned to raise INR 7,640 Cr via its IPO, which included a fresh issue of shares worth INR 5,000 Cr and an OFS of INR 2,460 Cr.
SEBI approved the proposal in January this year. However, the startup decided to defer its IPO due to market volatility. “Our view was that there was no point in taking our investors through a bumpy ride in this quarter (considering market conditions) and having to answer questions which aren’t related to the business. So we decided to wait it out,” CEO Barua said.
However, the startup has reduced its offer size and is now looking to raise INR 5,235 Cr, per its updated DRHP.
The logistics unicorn’s loss widened to INR 891.13 Cr during the nine months ended December 2021 as against a loss of INR 297.49 Cr in the corresponding period of the previous year. Its total income rose to INR 4,911.41 Cr during the period from INR 2,806.53 Cr in the year-ago period.
According to a Statista report, the Indian logistics market stood at around $250 Bn in FY21 and is estimated to grow to $380 Bn by 2025 at a CAGR of 10-12%.