logistics company Delhivery intends to launch its initial public offering (IPO). in the June quarter of 2022, said investment bankers with knowledge of the plans.
The Gurugram-based company submitted its draft Red Herring prospectus to the Securities and Exchange Board of India (Sebi) in November. It received approval from Sebi to go public in January.
Tough market conditions due to the Fed’s radical stance and Russia’s attack on Ukraine have roiled the IPO market after a record-breaking 2021.
“The market has improved over the past week amid ceasefire talks between Russia and Ukraine. If market conditions continue to improve, we may see big issuers like Delhivery start selling their shares,” said one banker. Four IPOs started last week, compared to just three between January and February.
Delhivery IPO is priced at around Rs 7,000 crore. It is India’s largest multimodal fully integrated logistics and supply chain company by revenue (FY21 basis).
Brokerage Motilal Oswal said in a recent note the domestic logistics sector presents a major addressable opportunity as it is expected to grow at a 9 percent CAGR to $365 billion between FY20 and FY26. It expects growth to be higher for the organized players due to their “relentless focus on technology and automation.”
Currently, the logistics market is highly fragmented, with organized players accounting for less than 4 percent of the market share. Motilal Oswal said the transition from the unorganized to the organized sector is already underway.
“This shift has picked up pace with the introduction of GST, which has increased demand for national, integrated supply chain service providers with integrated warehousing and transportation models that allow customers to scale operations at lower fixed costs, while providing opportunities to optimize floor space and To create capacity utilization, less inventory and faster and cheaper fulfillment,” Alok Deora and Dhirendra Patro, analysts at Motilal Oswal, said in a note.
According to Brokerage, some of Delhivery’s key advantages are an asset-light business model, a diverse customer base, and a sophisticated network infrastructure.
Motilal Oswal said Delhivery has proprietary technology systems that enable it to offer integrated logistics services to a variety of customers. Its technology stack consists of over 80 applications spanning all supply chain processes.
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