As I was preparing to leave for work in the morning, Delhivery's continous IPO advertisements on India Today TV caught my attention. As the advertisement made rounds after every bulletin, I had certain questions:
I read (way too much) about the rest of the IPO details on my local train journey and here is everything important that you need to know about it:
FIRST, THE IMPORTANT DATES
HERE ARE THE OTHER MINISCULE (BUT IMPORTANT) IPO DETAILS
OK, SO WHAT DOES DELHIVERY DO?
For those who are unfamiliar with the brand, Delhivery is a super popular logistics company that helps businesses (B2B) and individual customers (B2C and C2C) transport their goods across India and the world. It services more than 17,000 pin codes of the 19,300 PIN codes in India, thus having a great 90.6% coverage.
Delhivery mainly provides 5 types of services to function as a big brand in the supply chain management and logistics industry. These are:
NOW, IS THIS A BIG COMPANY?
Delhivery is a Unicorn. A 'Unicorn' is a privately held company that is valued at over US$1 billion at some point (ie. Rs 7,727 crore as of today). Delhivery became a Unicorn in 2019 when it received funding of $413 million (ie. Rs 3,196 crore) from SoftBank and Carlyle Group.
But Delhivery has always received funding consistently for the last 10 years. Here are the top 6 fundings it has received over the years.
NOW, WHAT DO THE NUMBERS LOOK LIKE?
Though the company has been consistently making losses, its losses have been reducing over the last three years. When it comes to the company's revenues, Delhivery has been consistently growing by more than 30%. Even its asset size has been growing at a consistently good speed.
|Period||Profits for the year (Rs in mn)||Revenues (Rs in mn)||Total Assets (Rs in mn)|
SHOULD YOU APPLY FOR THIS IPO? MAYBE SOMETIME LATER
Though Delhivery has a strong market position in delivering parcels and solving operating problems in an unorganised market, experts have mixed reactions to this IPO. Why? Well, experts think that Delhivery's IPO price range is too high because of the hefty valuation.
Delhivery's competitor Bluedart, which is also a profit-making company, has a valuation of about Rs 16,000 to Rs 18,000 crore. But Delhivery's valuation, which amounts to Rs 35,000 crore, is way too much for a loss-making company.
Also, Delhivery's negative cashflows and rising operating costs (because of rising fuel prices) are causing investors to think twice before applying.
WHICH EXPERT SAYS WHAT
Though many experts say that Delhivery is a great company for a long term investment in the stock market, here is what experts think about the IPO right now:
1. Yes, let's invest: Yes Securities
2. Invest, lekin dhyaan se: Choice Broking
3. Avoid: Samco Securities and Marwadi Financial Services
4. Not rated: Reliance Securities and Religare.
So, will you apply for Delhivery's IPO?