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Delhivery provides a full range of Logistics services, including delivery of express parcel and heavy goods, PTL freight, TL freight, warehousing, supply chain solutions, cross-border Express, freight services, and supply chain software. The company also offers value-added services such as e-commerce return services, payment collection and processing, installation & assembly services, and fraud detection.

DL is coming out with a maiden combo IPO of fresh equity issue worth Rs. 4000 cr. and an offer for sale of Rs.1235 cr. making an overall issue size of Rs. 5235 cr.

• To part finance its funding plans for organic growth Rs. 2000.00 cr
• Inorganic growth Rs. 1000.00 cr.
• Scaling up existing business lines and new developments Rs. 160.00 cr.
• Expansion of network infrastructure Rs. 1360.00 cr.
• Upgrading/improving proprietary logistics operating system Rs. 480.00 cr.

Delhivery is the largest and fastest growing fully-integrated logistics services player in India by revenue as of Fiscal 2021. It provides supply chain solutions to a diverse base of 23,113 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals such as fast-moving consumer goods (FMCG), consumer durables, consumer electronics, lifestyle, retail, automotive and manufacturing, for the nine months period ended December 31, 2021. . It collects, structures, stores and processes vast amounts of transaction and environmental data to guide real-time operational decision making.

The company operated 21 fully and semi-automated sortation centres and 82 gateways across India (excluding Spoton) as of December 31, 2021. It has a Rated Automated Sort Capacity of 3.70 million shipments per day as of December 31, 2021. It has automated material handling systems at its gateways in Tauru (Haryana), Bhiwandi (Maharashtra) and Bengaluru (Karnataka).

• Rapid growth, extensive scale and improvement in unit economics. Revenue CAGR at 48.49% stood highest amongst peers for FY19-21.
• The proprietary logistics operating system
• Vast data intelligence capabilities
• Company’s network operates as a dense, dynamic mesh, making it efficient, fast and agile in responding to changes in volumes, shipment profiles and environmental conditions
• The integrated portfolio of logistics services
• Strong relationships with a diverse customer base
• Extensive ecosystem of partners, enabling an asset-light business model and extended reach Highly qualified, professional team

Some of the key risks that are material to the operating model of Delhivery include:

• 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, which has increased competition from several organized and unorganized
•  players, and

• Dependency on certain large customers who contribute significantly to its business.

• Company has issued Equity Shares during the last one year at a price that may be below the Offer Price.

• They operate in a highly fragmented industry and face intense competition, which could adversely affect their results of operations and market share

On the financial performance front, for the last three fiscals, Delhivery Ltd has posted a turnover/net profit (loss) of Rs. 1694.87 cr. / Rs. - (1783.30) cr. (FY19), Rs. 2988.63 cr. / Rs. - (268.93) cr. (FY20) and Rs. 3838.29 cr. / Rs. - (415.74) cr. (FY21). For the nine months of FY22 ended on December 31, 2021, it has posted a loss of Rs. - (891.14) cr. on a turnover of Rs. 4911.41 cr. Due to negative earnings so far, its P/E cannot be measured. 

The company has shown continued losses. Special accounting provisions kept its bottom lines in red for all these years despite growth in top lines. The IPO is priced very aggressively, and when compared with its listed peers it has a negative PE and RoNW, hence we recommend our clients to “Avoid”.

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