Logistics startup Delhivery files DRHP with Sebi for Rs 7,460 cr issue

Primary issue will be of Rs 5,000 crore, which the company will raise via public issue; OFS by existing investors will be Rs 2,460 crore

Logistics startup Delhivery on Tuesday filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi), for an issue size of Rs 7,460 crore.

The primary issue will be of Rs 5,000 crore, which the company will raise via public issue. The offer for sale by the existing investors will be Rs 2,460 crore.

Key shareholders selling in the IPO are China Momentum Fund (Deli CMF) worth Rs 400 crore, Carlyle, worth Rs 920 crore, SoftBank worth Rs 750 crore and Times Internet worth Rs 330 crore.

According to the DRHP, Delhivery plans to utilise net proceeds of the IPO towards funding organic and inorganic growth through acquisitions and other strategic initiatives.

The company, as per the DRHP, operates a pan-India network and provides services in 17,045 postal index number (PIN) codes, as of June 30, 2021.

According to RedSeer Report, Delhivery was the largest and fastest growing fully-integrated logistics services player in India by revenue as of Fiscal 2021.

The company provides supply chain solutions to a diverse base of 21,342 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals such as FMCG, consumer durables, consumer electronics, lifestyle, retail, automotive and manufacturing, in the three months ended June 30, 2021.

It provides a full range of logistics services, including express parcel delivery, heavy goods delivery, PTL freight, TL freight, warehousing, supply chain solutions, cross-border express and freight services and supply chain software, along with value added services such as ecommerce return services, payment collection and processing, installation and assembly services and fraud detection.

It operated 20 fully and semi-automated sortation centres and 86 gateways across India (excluding Spoton) as of June 30, 2021.

It had a Rated Automated Sort Capacity of 3.17 million shipments per day as of June 30, 2021, which further rose to more than 3.98 million shipments per day as of September 30, 2021.

As per the RedSeer Report, the Indian logistics market presents a large addressable opportunity, with direct spends on logistics of $216 billion in fiscal year 2020 and is expected to grow to about $365 billion by fiscal year 2026 at a CAGR of 9.1 per cent.

This growth will be driven by strong underlying economic growth, a favourable regulatory environment, growth of domestic manufacturing, rapid growth of the digital economy and improvements in India’s transportation infrastructure. Within the logistics industry, the express parcel delivery segment, which is highly organized, is expected to grow at a CAGR of approximately 28-32 per cent by value to $10-12 billion by FY2026.