Delhivery is an Indian startup company that deals in logistics and supply chain management formed in 2011 by entreprenaurs Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan, and Kapil Bharati based out of Gurgaon. Majority of its revenue is generated through delivery services and third party logistics.
Delhivery Limited’s Activities include PTL freight, TL freight, warehousing, supply chain solutions, cross-border Express, freight services, and supply chain software
Delhivery Limited IPO is most awaited Upcoming IPO in logistic sector, there are many logistic stocks in current stocks which has strong fundamentals, but Delhivery is most known and buzzing delivery partner in ecommerce industry.
Delhivery Limited IPO Details
- The Company has decided to go public with an issue size of 5,235 Cr.
- IPO opens on may 11 10.00 AM and closes May 13 5.00 PM IST
- Allotment date is set on May 19th
- The lot Size 30 shares with a price bandwidth of Rs 462-487
- Kotak Mahindra Capital, Morgan Stanley India, Bofa Securities India, and Citigroup Global Markets are managing the share sale.
- The shares will be listed on 24th May 2022.
- An individual can maximum apply for 14 lots
You can also check IPO GMP
Key Points on Capital Structure
- Softbank : 22.44%
- Tiger Global : 15.38%
- Nexus Ventures : 14.77%
- Delhivery Founders (Cummulative) : 8.51%
It is to be noted that the top 3 investors are MNCs.
- The Debt to Equity ratio is 0.07 which is quite low compared to industry standards
- The EBITDA has increased by 68% during the financial year 2021-2022
- Current ratio is 3.08 which is a very good sign
- Return on Equity is at -12.30%
Revenue and operations
Being the leading player in the field of logistics and delivery in terms of revenue, Delhivery Ltd has earned over 3700cr in the previous financial year but is yet to make profits.
The company’s operating revenue (3646 Cr) when compared to non operating revenue is humongous which is a good sign for potential investors.
Delhivery functions in 17,045 PIN codes throughout the country which amounts for 88% of the country. Delhivery operates 83 fulfillment centers, with an aggregate floor area of 5.52 million sq. ft. It also has 120 intermediate processing centers
Strengths
- Machine Learning and AI driven real time business decision making
- Alliances with global level investors and domestic leaders
- Large Customer base
- Rapid growth in scale and efficiency
- Proprietary logistics technology systems
- integrated portfolio of logistics services
Weaknesses
- Decline in Networth % in the last FY
- Negative EBITDA, Cash flows and ROI
- 56% cut down of Fixed Assets
- Consistent increase in current liabilities when compared to current assets
- Highly Dependent on Network Infrastructure which could be hard to sustain over time.
Conclusion
Delhivery Limited has been showing rapid growth, scale and synergies across various lines of business. However the numbers show numerous risk factors which investors must take note of.
Sources say that the company is confident of growing at 50-55% annually. For that, it will double down on its established businesses such as e-commerce deliveries, and scale up its business-to-business (B2B) verticals in India and abroad.
Although being the leading company in its field and one that has increased in scale by large volumes, It seems to be that the negatives outweigh the positives and hence my opinion would be to wait this one out as far as investing in an IPO is concerned. Once the share is listed the true value of the company will be brought forward.
