Delhivery, a logistics company situated in Gurugram, recently saw a sizable ownership deal involving Japanese corporation SoftBank, marking a milestone in the Indian logistics industry. On November 17, roughly 2.51% of Delhivery’s equity changed hands in a deal valued at INR 747 Crores, at a price of INR 403 per share. This action is a component of SoftBank’s continuous plan to sell its stakes in international firms.
Credits: Inc42
SoftBank’s Stake Sale Strategy:
Previous Transactions: This is not the first time SoftBank has reduced its stake in Delhivery. Back in March, the Japanese conglomerate sold 3.8% of its stake, amounting to 2.8 crore shares worth INR 954.2 Crores through multiple block deals in the open market. As of September 2023, SoftBank’s SVF Doorbell (Cayman) held approximately 14.46% stake in Delhivery, as per BSE data.
Broader Trend: SoftBank’s recent move aligns with its global trend of lowering investments in startups. Reports had surfaced earlier that SoftBank was planning to sell a 1.1% stake in Zomato for at least INR 1,023.6 Crores. This follows SoftBank’s strategy of optimizing its portfolio and reallocating resources.
Delhivery: Pioneering Innovation in Indian Logistics
Delhivery, which was established in 2011, is now a leading player in the Indian logistics industry. The company’s journey from its founding to its listing as an entity in 2022 is characterized by its dedication to innovation and ability to adjust to the constantly changing needs of the market. Delhivery recently launched Delhivery One, a digital shipping platform designed to offer complete logistical solutions to D2C businesses and SMEs. This demonstrates Delhivery’s strategic focus on technology. Delhivery’s commitment to optimizing post-purchase experiences and expediting the shipping process is demonstrated on this platform, reinforcing the company’s leadership in the ever-changing logistics sector.
Delhivery’s Financial Landscape:
Quarterly Performance: Delhivery, founded in 2011 and listed last year, has been navigating the logistics landscape alongside competitors like Xpressbees, Blue Dart, Ekart Logistics, and Amazon Shipping. Despite the recent equity transaction, Delhivery posted a net loss of INR 102.9 Crores in the September quarter of the financial year 2023-24, showing a 59.5% reduction from the corresponding period in the previous fiscal year.
Delhivery One Platform: In August, Delhivery introduced a new digital shipping platform named Delhivery One. This platform aims to provide comprehensive logistics support to small and medium enterprises (SMEs) and direct-to-consumer (D2C) brands across India. Delhivery One integrates various shipping services, including post-purchase communication, analytics, international shipping, one-click integration with sales channels, and NDR (non-delivery report) management.
Possible Impact of the Stake Sale:
Strategic Implications: SoftBank’s decision to sell a portion of its stake in Delhivery raises questions about the strategic direction of both companies. While SoftBank continues its trend of divesting in startups, Delhivery might be reassessing its investor portfolio and seeking strategic partnerships to enhance its position in the competitive logistics market.
Market Perception: The equity transaction may influence market perception regarding Delhivery’s valuation and SoftBank’s confidence in the logistics unicorn. Investors and industry experts will likely closely monitor how this move aligns with Delhivery’s future plans and growth trajectory.
Industry Dynamics: The logistics sector in India is witnessing rapid transformation, driven by technological advancements and changing consumer expectations. Delhivery’s introduction of Delhivery One reflects the company’s efforts to stay ahead in the dynamic landscape and cater to the evolving needs of businesses, especially SMEs and D2C brands.
Conclusion:
Finally, SoftBank’s selling of a share in Delhivery adds yet another dimension to the changing dynamics of India’s logistics sector. Delhivery has demonstrated a proactive approach towards addressing industry issues and possibilities through its strategic decisions, such as the launch of Delhivery One. Stakeholders will be closely observing how SoftBank’s reconfiguration of its investment portfolio would affect Delhivery’s future objectives and market positioning. The unicorn in logistics is still navigating a challenging environment, and the recent equity deal may mark a turning point in its development.
