Delhivery makes listless debut; opens 1% higher against issue price

The stock of logistics services provider got listed at Rs 493, 1.2 per cent higher against its issue price of Rs 487 per share on the BSE

Logistics services provider, Delhivery, made a listless debut on the bourses on Tuesday, with its shares getting listed at Rs 493 on the BSE. This was 1.2 per cent higher against its issue price of Rs 487 per share. On the National Stock Exchange (NSE), the stock opened at Rs 495.20 per share.

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So far, the stock has hit a high of Rs 497.95 and a low of Rs 487 in the intra-day trade on the BSE and NSE. At 10:01 am, Delhivery was trading at Rs 487.45, almost at par against its issue price. A combined 1.01 million equity shares had changed hands on the counter on the NSE and BSE. In comparison, the S&P BSE Sensex was down 0.31 per cent at 54,121 level.

Delhivery had managed to garner full subscription despite challenging market conditions with the issue getting subscribed 1.63 times. Qualified institutional buyers portion attracted 2.66 times subscription, while the category for retail individual investors was subscribed 57 per cent and that for non-institutional investors 30 per cent.

The logistics major raised Rs 5,235 crore through initial public offer (IPO) aims to utilize the Rs 2,000 crore in funding growth initiatives, Rs 1,000 crore towards inorganic growth through acquisitions or strategic alliances and the remaining Rs 1,000 crore in general corporate purposes. The company, which is the largest integrated logistics player by revenue, is eyeing steady growth in the Indian logistics sector, as well as market-share gains in the organised space.

Delhivery provides supply chain solutions to a diverse base of 23,113 active customers such as e-commerce marketplace, direct-to-consumers e-tailers, and enterprises across several verticals. As of December 31, 2021, Delhivery had over 5,000 active customers and PIN code accessibility to over 13,000 regions.

According to the red herring prospectus, the company’s net loss widened to Rs 891 crore for the nine months ended December 2021 from Rs 297 crore posted a year ago.

Analysts at YES Securities believe Delhivery's asset light business model and its cutting‐edge engineering and automation capabilities along with its new age technologies will help company leverage its operating efficiencies and improve the profitability in the coming years.

The brokerage firm had recommended a 'SUBSCRIBE' rating from a long term perspective on Delhivery IPO issue given that the company is the largest and fastest growing 3PL express parcel delivery player, has unified infrastructure network, proprietary technology stack and capabilities, vast amount of data intelligence and R&D, experienced professional management team and strong relationship with diversified customer base.