Delhivery’s ₹5,235 crore initial offer to open on May 11

MUMBAI: Delhivery, the Softbank-backed logistics unicorn, plans to raise ₹5,235 crore next week through an initial public offering, a sign of IPO activity picking up after companies put the brakes on their plans to avoid a clash with Life Insurance Corp. of India’s mega-ipo and choppy markets.

The Delhivery IPO will open for subscription on 11 May. The price band has been set at ₹462487 per share, valuing the company at ₹35,283 crore at the upper end of the band. However, the issue size has been cut by a third from the initial plan to raise ₹7,460 crore because of volatility in equity markets.

Delhivery will be the first major IPO after a brief lull in activity as companies scrapped plans to go public after the Russian invasion of Ukraine and to avoid a clash with LIC’S ₹21,000 crore IPO, India’s largest initial share sale. Investors’ reaction to the Delhivery IPO may determine whether other such startups will brave the choppy markets to go public. Delhivery will raise ₹4,000 crore by selling new shares, and the company’s early investors will raise an additional ₹1,235 crore through an offer for sale (OFS).

The bidding for so-called anchor investors will open on 10 May, the company said. The three-day IPO will close on 13 May. Gurugram-based Delhivery will list on exchanges on 24 May.

Of the total issue size, 75% of the shares on sale will be available for allocation to qualified institutional buyers (QIBS), 15% for non-institutional investors and the balance 10% for retail investors. Around 60% of the QIB portion is reserved for anchor investors.

Proceeds from the issue will fund the company’s acquisitions and expansion plans, with a focus on automation, technology and other strategies.

“Delhivery has appetite and ability to make larger acquisitions and integrate them within the company. Delhivery has less than 0.5% share of the $300 billion market opportunity,” said Sandeep Barasia, chief business officer.

Under the offer for sale, its shareholders, including US private equity firm Carlyle Group, Softbank, Fosun group-owned China Momentum Fund and Times Internet, will divest a part of their ownership in Delhivery.

Carlyle will sell shares worth ₹454 crore, down from earlier plans to sell ₹920 crore; Softbank will now sell a stake worth ₹365 crore, down from ₹750 crore. Fosun will sell via Deli CMF Pte Ltd shares worth ₹200 crore, half its earlier ₹400 crore sale plan; and Times Internet will sell up to ₹165 crore.

In addition, Delhivery’s co-founders—kapil Bharati (its chief technology officer), Mohit Tandon and Suraj Saharan—will sell shares worth ₹5 crore, ₹40 crore and ₹6 crore, respectively.

With a 22.78% stake, Softbank is the largest shareholder in Delhivery, while Nexus Ventures and Carlyle hold stakes of 9.23% and 7.42% respectively.