SoftBank-backed integrated logistics company Delhivery which was listed on the stock exchanges on May 24 and ended a six-month IPO (initial public offering) drought for new-age technology companies saw its shares closing with a gain of little over 10 percent.
Delhivery’s stock ended at Rs 537.25 a share on the BSE, against the issue price of Rs 487 apiece, thus closing with a premium of 10.3 percent. The stock price had touched a high of Rs 568.90 in the afternoon trade, a premium of 16.8 percent to the issue price. Delhivery got listed at a premium of about 1.5 percent at Rs 493 per share on the BSE.
Delhivery, which also has the backing of Nexus Venture Partners, Carlyle Asia Partners, CPPIB, and Tiger Global, among others, counts Aberdeen New India Investment Trust, Goldman Sachs, Government of Singapore, Monetary Authority of Singapore, Fidelity, SBI mutual fund and HDFC mutual fund on its anchor book.
Delhivery became the first new-age technology company to get publicly listed in 2022. Paytm’s parent One97 Communications was the last new-age tech startup to list on the bourses, back in November 2021. The company’s stock performance in the near term will be closely watched by new-age technology companies like Pharmeasy, Oyo, and Snapdeal among others as these companies had filed draft papers with the Sebi last year but had pushed back their listing plans amid volatility in global financial markets.
Moreover, the hammering that some new-age technology companies received in the stock markets after they went public last year also led to these companies delaying their IPOs.
To be sure, the logistics company had reduced its total issue size to Rs 5,235 crore from the Rs 7,460 crore planned earlier, to ensure its IPO sails through. It will now raise Rs 4,000 crore via the fresh issue and Rs 1,235 crore through an offer for sale (OFS).
Moneycontrol had reported last week that shares of the company had fallen in the grey market and Delhivery’s stock was witnessing muted volumes, which indicated a lackluster listing on the indices for the logistics company, especially after its IPO saw a dull response from retail and high net worth investors.
Market experts, however, have cautioned investors and have advised taking calculative bets on the stock in the near term.
The company made a loss of Rs 891.14 crore for the nine months ended December 2021 and in FY21 it posted a Rs 416 crore loss. Revenue in the nine months ended December was Rs 4,911 crore; FY21 revenue was Rs 3,838 crore.
In FY21, it reported a negative free cash flow of Rs 246 crore versus Rs 848 crore in FY20. At the same time, freight, handling, and servicing cost has gone up from Rs 2,026 crore in FY21 to Rs 3,480 crore in the first nine months of FY22 (Rs 4,000 crore in FY22A).
In an interview with CNBC TV18, Sandeep Barasia, Chief Business Officer of Delhivery, said that the company incurred a one-time loss of Rs 500 crore, which impacted its profit for nine months ended December 2021.
Delhivery’s Managing Director and Chief Executive Officer, Sahil Barua, in a recent interview with Moneycontrol, had said that good always finds a way to go public, irrespective of what the market says.“We have to be cognizant of the fact that there's nervousness in the market and there are certain expectations that investors have. But otherwise, we're pretty confident and we've reached a size where our business model is stable, we've reached a size where strategically we are more stable and well understood as a company,” Barua had said.