SoftBank, Carlyle May Cut Their OFS Portions By 40% For Delhivery IPO Debut

Private equity funds like Japan-based SoftBank and US-based Carlyle may reduce their offer for sale (OFS) portions somewhere between 30% and 40% during the initial public offering (IPO) of logistics unicorn Delhivery.

According to bankers, global private equity firm Carlyle may reduce its OFS portion to around INR 500 Cr from INR 920 Cr, while SoftBank may cut it to INR 400 Cr from INR 750 earlier, as reported by ET. 

Kotak Mahindra Capital, Morgan Stanley, BofA Securities, and Citigroup are the issues’ bankers.

A day before, it was reported that the IPO-bound logistics aggregator is likely to cut down its IPO size from INR 7,460 Cr per its draft red herring prospectus (DRHP) to INR 5,500 Cr, in the wake of increasing market instability following the current geopolitical situation.

The Delhi NCR-based logistics aggregator is expected to file the red herring prospectus with the Securities and Exchange Board of India (SEBI) this week. The market regulator approved the logistics unicorn’s plan to file its INR 7,640 Cr IPO in January this year.

Delhivery’s three founders — Kapil Bharati, Mohit Tandon, and Suraj Sahara — were to offload shares worth INR 14 Cr, INR 40 Cr and INR 6 Cr respectively.

The reduction in the OFS size is expected to be from INR 2,460 Cr earlier to around INR 1,300-1,400 Cr, according to the report. 

The logistics startup held a board meeting on both Saturday and Sunday to discuss the timeline for its IPO. The board has cleared its plan with the offer launching right after the closure of the LIC IPO. Incidentally, LIC IPO’s subscription window closes on May 9.

With a 22.78% stake, SoftBank is the largest shareholder in Delhivery, while Nexus Ventures and Carlyle hold a 9.23% and 7.42% stake respectively. Its three founders – Kapil Bharati holds 1.11%, Mohit Tandon owns 1.88%, and Suraj Saharan has a 1.79% stake.

Founded in 2011, Delhivery provides a full suite of logistics services such as parcel transportation, full truckload and less than truckload freight, reverse logistics, cross-border, B2B & B2C warehousing, end-to-end supply chain services and technology services.

The startup raised $125M in its Series-I funding round in September 2021.It raised $275 Mn in its Series H funding round in May of 2021. In total, the startup has raised a cumulative amount of $1.4 Bn till date.

During the first quarter of FY22, the startup had recorded a consolidated net loss of INR 129.58 Cr, against a revenue of INR 1,317.72 Cr.

The startup has been bogged down by increasing costs especially in freight handling and servicing and employee benefits. Freight servicing expenses stood at INR 867.9 Cr while employee benefit expenses were around INR 206.45 Cr. 

The other startups preparing for IPO debut this year includes travel tech Giant ixigo, hospitality unicorn OYO, automobile marketplace Droom, fintech unicorn MobiKwik, healthtech unicorn PharmEasy, among others.   

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