Delhivery IPO opens today. Should you invest or Not?
Published On: Wednesday, May 11, 2022 | By: Team KnowMyStock
The Rs 5,235 crore IPO of India’s largest logistics service provider Delhivery will open for subscription today and close on Friday, May 13. The IPO is the second biggest for Dalal Street in the calendar year 2022 (CY22) after LIC. The IPO consists of a fresh issue of shares worth Rs 4,000 crore, and an offer-for-sale of Rs 1,235 crore. The price band of the issue is set at Rs 462-487 a share. Delhivery, which is the leading fully-integrated logistics services player in India by fiscal 2020-21 (FY21) revenue as per reports, has a diverse consumer base with 23,113 active customers. These are majorly e-commerce marketplaces, and direct-to-consumer e-tailers and enterprises.
Delhivery operates a pan-India network. Through its express parcel delivery network, it serviced 17,488 pin codes during nine-months ended December 31, 2021. This covered 90.61 per cent of the total pin codes in India.
Express parcel delivery business derives the maximum business for the company (62 per cent of total revenue during nine-months ending December 2021), followed by part truck load services (18 per cent of total revenue during 9MFY22).
Key Risks
As per a pre-IPO note by Motilal Oswal, major risks to the operating model of the logistics player include its heavy reliance on e-commerce, despite diversifying into other industry verticals, dependency on network partners and other third parties for transportation vehicles and manpower, lower barriers to entry in many of the segments in which it operates, and dependency on certain large customers who contribute significantly to its business.
We are on Telegram!
JOIN our telegram channel to receive updates on Financial News and Stock and FNO Tips.
Click Here!
Follow Us On:
