SEBI nod for ₹7,460-cr Delhivery IPO

Capital markets regulator Securities and Exchange Board of India (SEBI) has granted its final approval to the initial public issue of logistics company Delhivery. The market watchdog accorded its consent and issued its observation letter for the initial public offering (IPO) on January 13, a recent filing showed.

Delhivery had submitted the documents for its IPO to SEBI back in November last year, receiving the regulator’s observation last week. SEBI’s observation letter means final approval to an IPO from the watchdog.

The issue will be a mix of fresh issue and offer for sale (OFS), with Carlyle Group and SoftBank diluting their shareholding in the e-commerce supply company. The company will issue fresh equity to the tune of ₹5,000 crore for the IPO, whereas the remaining ₹2,460 crore will be offloaded by existing shareholders, as per the draft red herring prospectus (DRHP).

Under the OFS, CA Swift Investments, an subsidiary of Carlyle Group, will sell shares worth ₹920 crore; SVF Doorbell (Cayman) Ltd, an arm of SoftBank Group, will offload shares worth ₹750 crore; Deli CMF Pte Ltd, a wholly-owned subsidiary of private equity fund China Momentum Fund, L.P. will sell shares worth ₹400 crore; and Times Internet will sell shares worth ₹330 crore. Carlyle currently has a 7.42% stake in Delhivery, whereas SoftBank holds 22.78% share in the company. China Momentuum Fund holds 1.11% stake in the firm.

Promoters Kapil Bharati, Mohit Tandon and Suraj Saharan will sell shares worth ₹14 crore, ₹40 crore and ₹6 crore, respectively, during the IPO. The three promoters hold 1.11%, 1.88% and 1.79% stake in the company, as per current shareholding pattern.

According to the DRHP, Delhivery intends to use the proceeds from the IPO to fund organic growth initiatives, as well as inorganic growth through acquisitions and other strategic initiatives. The company has earmarked ₹2,500 crore and ₹1,250 crore for these objectives, respectively. The rest of the proceeds will be used for general corporate purposes.

Delhivery, run by Delhivery Private Limited, offers supply chain solutions to 21,342 active customers, including 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 June quarter of the current fiscal.

As on the end of the June quarter, the company had extended its services to 17,045 PIN codes across India with a team of 66,348 permanent employees and contractual workers. In August 2021, Delhivery had even acquired Spoton to enter the PTL freight service segment.

Delhivery had raised $275 million (around ₹1,995 crore) in May in the primary funding round led by Fidelity Management and Research Company. The company’s valuation was expected to exceed $3 billion with this funding.

For the upcoming IPO, Delhivery has named Kotak Mahindra Capital Company, BofA Securities India, Morgan Stanley India Company and Citigroup Global Markets India are the book running lead managers. Link Intime India is the registrar to the offer.