Delhivery IPO: 25% Of Net Proceeds To Be Used For Acquisitions & Investments

Logistics unicorn Delhivery has filed its draft red herring prospectus with SEBI for INR 7,600 Cr initial public offering (IPO). The offer consists of a fresh issue of INR 5,000 Cr and an offer for sale (OFS) of INR 2,460 Cr.

In its draft prospectus, the Delhi NCR based logistics startup said that the proceeds from the OFS will not be routed to the company and the targeted INR 2,460 Cr from the offer for sale will not form part of the net proceeds.

Out of the net proceeds of INR 5,000 Cr, the company will utilise INR 1,250 Cr or 25% of the proceeds for funding inorganic growth through acquisitions and investments. Further, half of the proceeds (INR 2,500 Cr) will be used for financing organic initiatives.

It also plans to utilise up to 25% of the net process for general corporate purposes. However, the amount will be finalised based on the offer price.

The company might revise its funding requirements and deployment from time to time on account of various factors. These include — change in costs, financial and market conditions, the management’s analysis of economic trends and business requirements, and the ability to identify and consummate new business initiatives.

According to several reports, the company is expected to hit the public markets at $4 Bn-$4.5 Bn valuation.

According to Delhivery’s DRHP filing, Masayoshi Son’s SoftBank will be offloading shares worth INR 750 Cr, whereas Carlyle Group is likely to sell shares worth INR 920 Cr. Times Internet will be selling shares worth INR 330 Cr. 

Three founders — Kapil Bharati, Mohit Tandon, and Suraj Saharan will be offloading shares worth INR 14 Cr, INR 40 Cr, and INR 6 Cr, respectively.  In March this year, the company witnessed exit of 2 cofounders i.e. Bhavesh Manglani and Mohit Tandon. They were reclassified as ‘retiring/non-active promoters’ in the Delhi NCR-based company. 

Last month, Delhivery had appointed Kalpana Moparia (former chairman of J.P. Morgan (southeast Asia), Romesh Sobti (former MD & CEO of Indusind Bank) and Sugata Gupta (MD and CEO of Marico Limited) as independent directors.

A few weeks back, the company had closed a funding round of $125 Mn from Lee Fixel’s venture capital firm Addition. The new funding round came just four months after it had raised  $275 Mn Series H round from Fidelity Management and Research Company along with participation from other public funds.

Delhivery had posted a loss of INR 415.5 Cr in FY21, a 55% rise from INR 267.9 Cr in FY20.

The logistic unicorn’s total income rose by 28% from INR 2,988.6 Cr in FY 20 to INR 3,838.2 Cr in FY 21. Delhivery’s expenses widened from INR 3,257.4 Cr in FY 20 to INR 4,212.7 Cr in FY 21. 

Founded in 2011, the Gurugram-based unicorn offers logistics services such as express parcel transportation, LTL and FTL freight, reverse logistics, cross-border, B2B & B2C warehousing, end-to-end supply chain services and technology services.

The startup provides supply chain solutions to 21,342 customers such as ecommerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals such as FMCG, consumer durables, consumer electronics, lifestyle, retail, automotive and manufacturing.