Delhivery said that its board has approved the acquisition of Algorhythm Tech for a cash consideration of Rs 14.90 crore.
Algorhythm Tech is a supply chain products and solutions company based out of Pune, India. The company offers comprehensive, end-to-end supply chain planning & execution solutions for industry sectors like FMCG, pharma, steel, auto, telecom etc. through their proprietary, AI-enabled and cloud-ready rhythm 2.0 platform. The platform consists of a dozen products designed to deal with various problems in manufacturing, supply chain, and sales & distribution processes. The company had recorded turnover of Rs 3.6 crore in FY22.
Offering the rationale for the said acquisition, Delhivery said that Algorhythm Tech's supply chain software tools are relevant to the company's supply chain services business - both as a value added service to its customers, and to drive cost optimization in service delivery.
Delhivery will pay Rs 14.90 crore for the acquisition of shares and certain other payments to outgoing management team members. In addition, Delhivery may provide inter-corporate loans to/ infuse additional capital in the company to meet business requirements and settle past arrears and other liabilities.
"The acquisition will be funded from the proceeds raised through the initial public offer, the company said in a statement.
It expects to complete the transaction by 31 January 2023. Upon completion of the acquisition, Algorhythm Tech will become wholly owned subsidiary of Delhivery.
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Delhivery is the largest and fastest growing fully-integrated player in India by revenue in Fiscal 2021. It provides a full suite of logistics services such as express parcel transportation, PTL freight, TL freight, cross-border, supply chain, and technology services.
Delhivery reported revenue from services of Rs 1,796 crore in Q2FY23, up 22% YoY from Rs 1,474 crore on a reported basis and up 9% YoY from Rs 1,644 crore on a pro forma basis in Q2FY22. Loss after tax in the same period narrowed from Rs 643 crore in Q2FY22 on a pro forma basis to Rs 254 crore in Q2FY23.
The scrip shed 0.27% to currently trade at Rs 351.45 on the BSE.
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