The famous logistics services provider Delhivery has received approval from SEBI (Securities and Exchange Board of India) for their proposed IPO of Rs 7460 crores.
This is the first unicorn to receive the nod from SEBI for listing on domestic bourses this year.
Delhivery is one of the largest logistics startups in the country. The Noida-based company reported a revenue of Rs 3646.5 crores in 2020-21.
As per the draft papers, the logistics giant is planning to raise Rs 5000 crore via fresh issue of shares and Rs 2460 crore via OFS or offer-for-sale.
Delhivery has more than 21000 clients that include e-commerce businesses and direct-to-home companies.
Delhivery is one of the fastest-growing, completely integrated logistics services companies in India.
Delhivery gives you a complete range of logistics services that include heavy goods delivery, express parcel delivery, partial truckload freights, supply chain solutions, truckload freight, warehousing, cross-border freight and express services, and supply chain software.
These services are offered in addition to the several other value-added services they provide such as payment collection, e-commerce return services, and payment processing.
Delhivery has a countrywide network and it has a presence in all the Indian states.
Delhivery has 20 semi and fully automated sortation centres with 86 gateways across the country.
They have a pan-India network and they provide services in more than 17000 postal codes. The business gives you a full range of logistics-related services and this separates them from other popular logistics businesses in the country.
Some of the Delhivery peers are TCI Express Ltd, Blue Dart, and Mahindra. In terms of revenue, Delhivery is the biggest player among these peers. But has negative numbers in EPS and RoNW areas.
Delhivery Business Model
Delhivery utilizes the business-to-business or B2B model. While using this model rather than targeting specific individuals, the businesses get in touch with other businesses for providing their services.
Delhivery provides different services to other businesses such as order management, third-party fulfilment, logistics, and shipping.
The e-commerce sector is extremely competitive and you have to face cut-throat competition here among different businesses.
There is no room to relax even for a shorter period.
With continuous growth, Delhivery is providing a head-bent competition to other logistics businesses such as Future Supply Chain (FSC), FedEx, and Delivery.com.
Delhivery has gradually become one of the top logistics companies in India with their hard work and grit.
The Delhivery market share has grown dramatically during the pandemic.
The company is also planning to develop truck terminals in significant cities such as Bangalore, Mumbai, Delhi, Hyderabad, and Kolkata. Apart from that, they keep on investing in developing a truck infrastructure.
The company delivers more than 1.5 million orders every day and has a fleet of close to 7000 drivers and 5000 trucks at their disposal.
What is an IPO?
The long-form of IPO is an initial public offering. The IPO stocks meaning is that they are the first time any business offers shares to the general public.
So, this is when a private organization has decided to go public. An organization that was privately owned till then becomes a publicly owned company.
Before the arrival of an IPO, the organization has a small number of shareholders including its founders, venture capitalists, and angel investors.
However, at the time of IPO, an organization opens the shares for selling in public.
You may buy shares directly from the business as an investor and become one of the shareholders in the business.
Pros of an IPO
- Raising capital for expansion: All companies need money for raising their operations, paying off the existing debts, and creating newer products. Going public is a terrific way of raising this much-needed capital for your business.
- Advantage of being a first-mover: This is an advantage that is specifically more significant when reputed businesses announce their IPO. There is an opportunity to buy the company shares at lower prices. This is possible because the company shares find their way to the secondary market and share prices can go up sharply.
- Bigger returns: When an organization has the potential to grow, purchasing shares in an IPO is beneficial to you. If the company has strong fundamentals, it indicates that there are good chances of the company growing larger. It is advantageous for the shareholder as well. You are likely to earn better returns in the long run.
- Gains from a listing: When a business is listed in the stock market, it is traded at prices that are either lower or higher than compared to the allotment prices. If the opening price is higher than the allotment price it is termed as a listing gain. Usually, the investors expect the IPO to fare well in the listings because of factors such as positive bias and market demand. But this does not happen all the time. Stock prices may drop even on the first day of trading. The listing gains, in reality, might not prove to result in good returns in the longer term. If you are interested in quick gains this may not be a suitable investment. However, for the long-term investors, it is imperative to identify the business that has the potential to offer greater returns in five or ten years down the line.
- Better public awareness: IPOs are star-marked in a stock market calendar. There is a lot of publicity and buzz involved in these events. It is a terrific way of publicizing the products and services for new customers entering the market.
Delhivery IPO Hot News
After receiving the SEBI nod for its 7460 crore IPO, the Gurugram based logistics giant has become the first unicorn this year to receive the approval of market regulators.
During the process of DRHP filing, the Delhivery valuation was expected to be close to $6 billion for their listing.
Delhivery is one of the biggest beneficiaries of the massive growth of the e-commerce business.
Earlier this month, Delhivery invested in the company Falcon Autotech. It is a warehousing automation unit from Noida.
This investment is preparation for developing future-ready solutions for their operations.
How to Start Your Own Logistics Business?
First, you need to decide where you are going to raise the capital for your logistics business.
Next, is considering the expenses associated with the niche. You must take into account the maintenance expense, and operating costs as well.
Keep in mind that you are going to need money, for your vehicle maintenance. Selecting the right vehicles for your business and deciding the money you are willing to spend for a fleet is really crucial.
You need to embrace technology for the logistics business and make sure that customers can track their deliveries.
Tookan can be a great platform to start and grow your own delivery business without worrying about any hassle. It also allows the companies to optimize routes, automate, and efficient movement of their goods.
Delhivery provides a complete range of logistics services. The technology they use is developed to meet the dynamic requirements of modern-day supply chains.
You can consider Jungleworks for technical assistance for your logistics business.
According to sources, the Delhivery IPO is expected to arrive in the market by end of January 2022.