SUMMARY
Delhivery Is Looking For A Valuation Of $2-2.8 Bn In The IPO
As the Indian logistics sector continues to expand and witness increased competition, ecommerce logistics startup Delhivery is now looking at its next phase of growth with a $350 Mn IPO (initial public offering) in the next few months.
Reports cited people familiar with the development as saying that the company is aiming for a valuation of $2-2.8 Bn in the IPO through a mix of primary and secondary share sales.
Further, Delivery has hired investment banks Goldman Sachs, Morgan Stanley, Citigroup, and Kotak to run the IPO.
The Gurugram-headquartered startup is expected to file its draft red herring prospectus in a few months. “The proposed IPO will give a partial exit to PE investors who have been with the company for the past three-four years,” the report added.
The brainchild of Sahil Barua, Mohit Tandon, and Suraj Saharan, Delhivery was launched in 2011 with the aim to disrupt the logistics supply chain market in India.
Later, the trio was joined by Bhavesh Manglani and Kapil Bharati. The startup currently claims to service about 600 cities and 8,500 PIN codes. It has about 12 fulfilment centres for B2C and B2B fulfilment services and works with companies like Flipkart and Paytm.
The company is backed by giants like Carlyle Group, China’s Fosun Group, Goldman Sachs Investment Partners, Tiger Global, Renuka Ramnath-led Multiples Alternate Asset Management, Nexus Venture Partners and Times Internet.
It has raised $257.6 Mn funding since its inception, with two major investments in 2017– $100 Mn from Carlyle and Tiger Global together and another $30 Mn from Chinese conglomerate Fosun Group.
At the time, Delhivery was valued at $650 Mn.
In FY17, the company narrowed down its losses to $36.31 Mn (INR 249 Cr) from $54.10 Mn (INR 371 Cr) in FY16, while revenue rose to $109.52 Mn (INR 751 Cr) from $76.26 Mn (INR 523 Cr). Delhivery is one of the 34 startups which according to Inc42 have the potential to be Unicorn club in 2018.
Other startups in this segment include Bengaluru-based Locus, Ahmedabad-based logistic IoT startup Locanix; Pune-based logistics startup XpressBees amongst others.
According to a report by investment bank Avendus Capital, the logistics tech market is expected to surge to $9.6 Bn by 2020.
Poised to touch $307 Bn by 2020, the Indian logistics sector has been witnessing increasing investments and competition. Inc42 DataLabs revealed that the sector recorded 27 deals worth $475.83 Mn in 2017.
In Q1 2018, the sector witnessed 3 deals worth $70.3 Mn according to Inc42 Tech Startup Funding Report Q1 2018.
IPOs: The Emerging Attractive Option For Startups
With the booming Indian startup ecosystem and increasing competition in several sectors, startups have been going the public offering way to raise capital for their plans.
Recently, reports surfaced that Delhi-based online marketplace IndiaMART is working on an IPO that could see it raise around $73.53 Mn – $88.24 Mn (INR 500-600 Cr) through a mix of the primary and secondary share sale.
Inc42 had recently reported that Ahmedabad-based etailer for regional goods Salebhai has filed a Draft Prospectus (DP) with the SME platform of BSE Ltd.
At the same time, E2E networks made a rockstar debut on IPO. Further, the Newgen IPO marked the close with 4.28 times subscription on the last day and received bids for 5.23 Cr shares, against the total issue size of over 1.22 Cr scrips.
Matrimony, which had gone for IPO in September 2017, had received bids for 12,409,980 shares against a total issue size of 2,811,280 shares.
As the logistics sector gets increasingly competitive, the startups like Delhivery are on a great growth trajectory to explore the public market with their IPO.
[The development was reported by ET.]
