Delhivery IPO: SoftBank Gets 148% ROI While Times Internet Makes 139X Returns

Shares of Gurugram-based logistics startup Delhivery listed on the bourses on Tuesday (May 24), five months after it received markets regulator SEBI’s nod for public listing. With this, Delhivery became the first tech startup to go public at a time when the global market sentiment is negative.

Shares of all the listed startups, irrespective of their profitability, have been under pressure in recent times due to the negative market sentiment globally. Amidst all these, Delhivery shares ended 10% higher from its issue price of INR 487 on its listing day, bringing some hope for retail as well as institutional investors.

The logistics startup’s IPO turned out to be a money making event for some of its big investors, including SoftBank and Times Internet. 

Japan’s SoftBank, which has backed giants such as Grab, Uber, WeWork, among others, is the largest stakeholder in Delhivery. Masayoshi Son’s company held around 22.78% stake in Delhivery before it went public.

SoftBank entered the cap table of Delhivery quite late. The venture capital first invested in Delhivery in March 2019, pumping in around $315 Mn as part of a $415 Mn equity round. As per regulatory filings, Delhivery had then allotted a total of 12,35,331 preference shares. It is worth mentioning that it was SoftBank’s investment that actually helped Delhivery get the unicorn status in 2019 – a time when the total number of unicorns in the country stood at 32. 

As per the startup’s regulatory filings, in December 2019, SoftBank bought Delhivery shares worth $42 Mn through a secondary transaction. 

Over the period of time, SoftBank and other investors received bonus shares at a 1:100 ratio. As per Delhivery’s Red Herring Prospectus (RHP), the Japanese company held a total of 14,15,93,300 shares in the startup and the weighted average cost of acquisition per equity share for SoftBank was INR 196.19. Of these, it sold 5% stake, or 7,494,867 equity shares, amounting to INR 365 Cr or $47 Mn at the issue price of INR 487.

Considering the acquisition cost and the selling price of INR 487, the return on investment (ROI) for the 5% stake it sold would be 148.2%. The value of the remaining shares of the startup held by SoftBank stood at $873 Mn considering the closing price of Delhivery shares of INR 505.10 on the NSE on Thursday.

Time Internet, one of the early backers of Delhivery, held 4.92% stake in the logistics unicorn and sold shares worth $21 Mn in the IPO. As per the RHP, Times Internet purchased equity shares of Delhivery at an weighted average cost of INR 3.5. Just like SoftBank, if we calculate the ROI for Times Internet, it turns out to be a staggering 13,814%. Even after selling 11% stake in the IPO, Times Internet as on today continues to hold shares worth $184.3 Mn 

American multinational private equity firm Carlyle Group, which held 7.16% in Delhivery before listing, sold 9.3 Mn equity shares during the IPO. Considering its weighted average cost of acquisition of INR 139.8 per share, Carlyle Group’s ROI was at 248.3% when it sold a part of its stake in the IPO. Even after selling 20% stake during the IPO, Carlyle Group as on today continues to hold shares worth $239.6 Mn. 

Though Delhivery’s share price dropped 6% to INR 505.11 on the third day of trading, the startup’s overall valuation stood 3.51% higher at $4.71 Bn against its pre-IPO valuation of $4.55 Bn. Delhivery’s successful listing will further encourage other Indian startups who are looking to go public.

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