Delhivery, an Indian logistics firm, said in a filing with the local regulator that it plans to raise $998 million in its first public offering, following a slew of other digital businesses in the world’s second-largest internet market in exploring the public markets.
According to a document, the 10-year-old business proposes to issue new shares worth $669 million, with the remaining funds going toward buying existing shares (PDF).
According to the Indian publication Economic Times, the business, which was valued at over $3 billion four months ago, is aiming for a public market listing at a valuation of over $6 billion.
Delhivery, which is backed by SoftBank, Tiger Global Management, Times Internet, The Carlyle Group, Steadview Capital, and Addition, started as a meal delivery business but has now expanded to provide a full suite of logistical services in over 2,300 Indian cities and over 17,500 zip codes.
According to data analytics platform Tracxn, the Gurgaon-based corporation has garnered $1.37 billion in investment over the years.
It’s one of a few businesses using a freight exchange platform to try to automate the logistics market’s demand and supply structure.
Its platform links shippers, agents, and drivers that provide road transportation services. The platform, according to the firm, minimises the role of brokers, improves the efficiency of certain of its assets, such as trucks – the most popular way of transportation for Delhivery — and assures round-the-clock operations.
This digitalization is necessary to overcome inefficiencies in the Indian logistics industry, which have hampered the country’s economy for years. Carrying costs rise as a result of poor supply and demand planning and forecasting. theft, damages and delays, analysts at Bernstein wrote in a report last month about India’s logistics market.
According to its website, which claims to have delivered over 1 billion orders, Delhivery works with “all of India’s top e-commerce firms and prominent corporations,” as well as over 10,000 clients. Its couriers are allotted an area that never exceeds 2 square kilometres for the last leg of the delivery, allowing them to make many delivery runs per day to save time.
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The TAM (total addressable market) of the Indian logistics business is above $200 billion, according to Bernstein analysts in a note to clients earlier this year. Late last year, the business announced plans to invest more than $40 million in the next two years to develop and grow.its fleet size to meet the growing demand of orders as more people shop online amid the pandemic.
Delhivery, a SoftBank Group-backed Indian logistics business, has filed for an initial public offering (IPO) for up to 74.6 billion rupees ($997.33 million), joining a lengthy list of firms that have sought funding this year.
According to Refinitiv data, 157 companies in India have raised $17.22 billion through IPOs this year, compared to $8.54 billion raised by 49 companies in the same period last year, including TPG-backed Nykaa and SoftBank-backed Paytm, Oyo Hotels and Rooms, and online insurance aggregator Policybazaar.
According to a copy of the company’s draught herring prospectus dated November 1, the IPO would include a new issuance of shares worth 50 billion rupees and an offer for sale of shares worth 24.6 billion rupees.
According to the government’s Logistics Skill Council, Delhivery competes with DHL’s affiliate Blue Dart Express Ltd and DTDC India in the $150 billion domestic logistics industry, which contributes approximately 14% to the country’s gross domestic product.
The bookrunning lead managers for the IPO are Kotak Mahindra Capital, Morgan Stanley India, BOFA Securities, and Citigroup.
The primary issuance for the Delhivery IPO would be Rs 5,000 crores, which the end-to-end supply chain unicorn will fund through a public offering. Existing investors will make a Rs 2,460 crore bid to sell the company.
China Momentum Fund (Deli CMF) is selling Rs 400 crore, Carlyle is selling Rs 920 crore, SoftBank is offering Rs 750 crore, and Times Internet is selling Rs 330 crore in the IPO.
According to sources, the company’s IPO valuation forecast is approximately $5.5 billion, depending on the demand-supply scenario closer to listing.