Delhivery to double down on organic and inorganic investments in India after IPO
- ByStartupStory | May 6, 2022
Logistics startup Delhivery, whose IPO will open for membership on May 11, will continue doubling down on expansion through organic and inorganic investments in India, according to its executive director and chief business officer, Sandeep Barsia. Sandeep further added that it also sees overseas markets as an opportunity for growth.
The IPO subscription window of SoftBank and Carlyle-backed Delhivery will close on May 13, and the company has fixed a price band of INR 462-487 per share.
“We have a large addressable market as I have talked about multiple times. We will continue to double down on the addressable market. Today at Rs 5,000 crore of revenue for the first nine months of FY22, we are still at less than half a percent of the $300 billion market opportunity we have,” Sandeep Barsia said at the press conference.
Barsia also noted that the logistics industry is highly fragmented, and one cannot expect smaller companies to reinvent themselves.“Our M&A philosophy is about looking at businesses that will add immediate scale to the company in one of our core businesses or add a specific capability to the business we want to build. That’s what we’ve done in the past. For example, Spotton added a huge amount of scale to the part truckload business very quickly and put us in the number two position in the market”, added Sandeep.
Delhivery acquired Spoton in August 2021 in a cash transaction of USD 300 million. The logistics major had recently also acquired drone startup Transition Robotics.
“Partnerships with FedEx, a global integrator, and our investment in Falcon Autotech show that we have the appetite and ability to drive consolidation in the market. We will continue to use this as a growth pillar,” noted Sandeep.
Of the Rs 5,235 crore offer, Rs 4,000 crore would be through a primary share sale, while the remaining Rs 1,235 crore would be through an offer for sale. In OFS, existing investors sell a part of their stake to new investors, and the money does not go to the company. In Delhivery’s OFS, investors like Fosan will sell shares worth INR 200 crore, while Carlyle and SoftBank will sell stakes worth INR 365 crore and INR 454 crore, respectively. Times Internet is also selling shares worth INR 165 crore in Offer-for-sale.
The Startup plans to use INR 2,000 crore from the IPO for organic expansion and INR 1,000 crore for inorganic growth through acquisitions and various other strategic initiatives. The remaining proceeds will be for general corporate purposes, the company said. Delhivery had originally planned an IPO of Rs 7,460 crore but later cut the size owing to market conditions.
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