Muted listing: Delhivery IPO shares list at Rs 495.20 – a 1.68% premium over issue price

The shares of India’s largest fully integrated logistics services company by revenue climbed 1.68 percent on May 24, the listing day. The initial signals from the grey market were not very encouraging for the stock to have a strong listing. The stock was trading with a discount of Rs 5 in the grey market on May 23. The stock opened at Rs 493, against an issue price of Rs 487 on the BSE, while the listing price on the NSE was Rs 495.20. Market experts had predicted a weak listing for the stock looking at the muted response from the investor community.

The IPO hardly sailed through, and retail investors barely participated despite the company reducing its issue size compared to earlier. The company has garnered Rs 5,235 crore from this issue, compared to Rs 7,460 crore it had planned to raise earlier. The issue was subscribed 1.63 times when it closed for subscription on May 13. According to the NSE data, the offer received total bids for 10,17,04,080 shares as against 6,25,41,023 shares on offer.

Qualified institutional buyers portion attracted 2.66 times subscription, while the category for retail individual investors was subscribed 57 percent and that for non-institutional investors 30 percent.

“We expect the listing to be tepid and damaging as the current market hates high-growth tech stocks with negative earnings,” Sonam Srivastava, Founder at Wright Research had said about the listing of the issue. Samir Bahl, CEO, Investment Banking at Anand Rathi Advisors concurred with Sonam and said, “Though not comparable to recently listed new age firms like Paytm and Zomato, we believe investors are pegging Delhivery to these firms that are trading well below their IPO price.” Started in June, 2011, Delhivery is the largest fully integrated logistics services company in India by revenue and provides full range of logistics services, including delivery of express parcel and heavy goods, warehousing, supply chain solutions, cross-border Express freight services, and supply chain software. It has built a network covering every state, servicing 17,045 PIN codes or 88 percent of the 19,300 PIN codes in India.

The Gurugram-based company became a unicorn – valued at over $1 billion – when it raised $413 million in a Series F round led by SoftBank Vision Fund in 2019. It provided supply chain solutions to a diverse base of 23,113 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers, and enterprises and SMEs across several verticals. Around 64 percent of the revenue generated by the company was from the customers that have been associated with the company for last three years. The company has never reported a profit, though its losses have come down over the years.

It company made a loss of Rs 891.14 crore for the nine months ended December 2021 against a loss of Rs 415.7 crore recorded for FY21. Revenue, however, increased to Rs 4,911 crore in the nine months ended December as against Rs 3,838 crore in FY21. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.