Logistics supply chain startup Delhivery received approval from the Securities and Exchange Board of India (SEBI) on Tuesday to raise Rs 7,460 crore (~$ 997.3 million) through an initial public offering (IPO). The IPO is expected to launch next month, according to reports.
Markets regulator SEBI issued an observation letter on January 13. It should be noted that the draft red herring prospectus (DRHP) of Delhivery was filed with SEBI in early November 2021. According to the company’s draft red herring prospectus (DRHP), the IPO comprises a primary issue of shares worth Rs 5,000 crore as well as an offer for sale (OFS) by existing investors worth Rs 2,460 crore.
Carlyle Group, which owns 7.42 percent of the company, is slated to sell shares worth Rs 920 crore, whereas SoftBank, which controls 22.78 percent of Delhivery, is likely to liquidate shares worth Rs 750 crore. China Moment Fund will also sell Rs 400 crore in shares, and Times Internet will offload another Rs 330 crore through the OFS. Kapil Bharati, Mohit Tandon, and Suraj Saharan, the founders of Delhivery, are also planning to sell shares for Rs 62 crore in the proposed IPO.
The Gurugram-based startup is seeking a valuation between $5-5.5 billion from its proposed IPO. The book-running lead managers for the offering are BofA Securities, Citigroup, Kotak Mahindra Capital, Morgan Stanley India. Delhivery turned unicorn in 2019 after raising $413 million in a Series F round of funding led by SoftBank Vision Fund, along with existing investors Fosun International and Carlyle Group at a valuation of $1.5 billion.
It seeks to use the capital raised from the IPO to fund organic as well as inorganic growth initiatives, which include acquisitions among other strategic capabilities. While around Rs 2,500 crore is set aside for organic growth initiatives, another Rs 1,250 crore is set aside for expansion through acquisitions and other strategic initiatives, according to the DRHP.
Delhivery also said in its draft prospectus, “In case of any surplus after utilization of the net proceeds towards the aforementioned objects, we may use such surplus towards general corporate purposes, provided that the total amount to be utilized towards general corporate purposes does not exceed 25% of the net proceeds in accordance with applicable law.”
In terms of revenue, the IPO-bound logistics startup is the largest and fastest-growing fully-integrated logistics solutions company in India as of FY21. Delhivery’s proprietary technology solutions allow it to provide seamless logistics services to a diverse range of customers. Its technology stack includes more than 80 applications that handle all supply chain operations, such as order management, transportation management, warehouse management, financial transactions such as billing & remittance, tracking, and supply chain analytics.