Delhivery IPO
Delhivery Limited
Rs. 14,610 / 30 shares
Minimum Investment
IPO Details:
IPO date:
11th to 13th May, 2022
Issue size:
Rs. 5,235 crores
Listing at:
BSE & NSE
Retail quota:
10%
IPO price:
Rs 462 - 487 per equity share
Minimum lot size:
30 equity shares and in multiples of 30 thereafter
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Company Background
Delhivery is the largest and fastest growing fully-integrated logistics services player in India by revenue as of Fiscal 2021 (Source: RedSeer Report). The company has achieved significant scale and growth, as demonstrated by the below metrics.
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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.
Delhivery's business is guided by three operating principles:
- People-centricity: Its infrastructure, network and technology enables the company to solve supply-chain problems that affect millions of people every day.
- Growth through partnership: Its infrastructure and technology capabilities are designed to be accessible to its partners in India and around the world.
- Efficiency: Saving money for its customers allows them to do more with what they have. The company strives relentlessly for efficiency and for new ways to reduce costs throughout the supply chain.
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).
This automation, combined with system-directed floor operations, path expectation algorithms and machine-vision guided truck loading systems, together enable its facility staff to be more productive and reduce errors in their operations.
This is achieved through high-quality logistics infrastructure and network engineering, a vast network of domestic and global partners and significant investments in automation, all of which are orchestrated by its self-developed logistics operating system that is guided in real-time by deep sources of proprietary network and environmental data. Together, these create intersecting flywheels that drive network synergies within and across its services and enhance its value proposition to customers.
Let us now look at a few competitive strengths and strategies of Delhivery Limited..
Competitive Strengths of Delhivery IPO
+ Rapid Growth, Extensive Scale, and Improvement in Unit Economics: Delhivery is the largest integrated and fastest growing fully integrated logistics services player in India by revenue as of Fiscal 2021, according to the RedSeer Report, which has been exclusively commissioned and paid for by the company in connection with the Offer. Its revenue from contracts with customers has grown from Rs. 16,538.97 million in Fiscal 2019 to Rs. 36,465.27 million in Fiscal 2021, or a Compound Annual Growth Rate (CAGR) of 48.49%. In Fiscal 2021, the company fulfilled over 289.20 million express parcel orders, carried 373,854 tonnes of PTL freight, processed 47.37 million orders through its fulfilment centers and completed more than 46,878 truckload movements. In August 2021, Delhivery Limited acquired Spoton which delivered 758,730 tonnes and 683,999 tonnes of PTL freight in Fiscal 2021 and the nine months period ended December 31, 2021, respectively. Delhivery's network structure, quality of engineering and technology and data intelligence capabilities have helped the company establish scale in all of its business lines and ensure synergies across them. This has driven higher network utilization, resulting in cost efficiencies, while maintaining service speed and reliability.
+ 2. Proprietary Logistics Operating System: Delhivery's team of 505 engineering, data sciences and product professionals, as on December 31, 2021, has built proprietary technology systems that enables it to offer integrated logistics services to a wide variety of customers. Its technology stack consists of more than 80 applications that encompass all supply chain processes including order management, warehouse management, transportation management, financial transactions such as billing and remittance, tracking and supply chain analytics, and that integrate with its customers’ systems. Its robust, scalable and service-agnostic architecture enables the company to enable partners like franchisees, retail partners and delivery agents to onboard their physical assets and resources on its platform, allowing the company to seamlessly scale network capacity up or down.
+ Vast Data Intelligence Capabilities: Delhivery collects, stores, processes, structures and analyzes the vast quantities of transaction data such as location data, product information, shipper and consignee information, data from operational facilities, activities and devices, performance data for its field teams, data on traffic and weather from several internal and environmental sources. As the company has expanded operations and business lines, it has grown access to new sources of data and, simultaneously, its ability to draw insights from these data. The company uses machine learning, artificial intelligence and operations research to build institutional intelligence, automation and dynamic optimization capabilities that enable it to solve several complex operational problems. In 2020, these capabilities enabled Delhivery to activate over 8,300 PIN codes within 10 days of the nation-wide COVID-19 lockdown and re-establish operations across its network by enabling them to identify essential goods and containment zones from unstructured lists published by local, state and national authorities.
+ Network Design and Engineering : Delhivery'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 mesh structure allows the company to reduce overall touchpoints in the journey of shipments through the network, reducing handling and improving precision, while also allowing them to utilize multiple feasible trans-shipment paths in periods of volatility. The company has designed and developed in-house capabilities in hardware design (for example, in packaging), automation and integration for shipment sortation, box/bag sortation, and weighing and dimensioning. These automated systems are fully integrated with its logistics operating system, thereby reducing human intervention. A high degree of in-facility automation and shorter trunk routes in the last mile, due to its dense mesh network, also creates a work environment wherein its operational staff is placed under reduced physical and decision making stress while improving productivity and earnings.
+ Integrated Portfolio of Logistics Services: Delhivery's aim is to meet its customers’ requirements for overall, rather than mono-line, supply chain reliability and efficiency. The company provides a full-range of logistics services, including express parcel delivery, heavy goods delivery, PTL freight, TL freight, warehousing, supply chain solutions, cross border express and freight services and supply chain software, along with value added services such as e-commerce return services, payment collection and processing, installation and assembly services and fraud detection. In addition, the integrated approach allows it to exploit network and infrastructure synergies, reduces its dependence on any single business line and also reduces the effect of cyclicality in its customers’ businesses on its operations. This leads to lower costs and greater reliability due to its ability to operate with higher fixed capacities, balance network inefficiencies (like PTL or truckload backhaul) and share infrastructure and operational costs across business lines.
Key Strategies
Here are a few strategies Delhivery Limited has for its business:
Expand investments in infrastructure and network
Continue to build scale in existing business lines
Deepen its customer relationships
Enhance its technology (software and hardware) capabilities
Externalise its logistics operating systemCreate new adjacent growth vectorsExpand into high-growth international markets similar to IndiaPursue strategic alliances and select acquisition and investment opportunitiesKey Financials
And finally here’s a look at key financials of Delhivery Limited…
Revenue from operations
Particulars (in Rs. Millions)
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Top Delhivery IPO FAQs
The Delhivery Limited IPO has an issue size of Rs. 5,235 crore. The IPO opens for subscription on 11th May, 2022, and ends on 13th May, 2022.
The allotment dates are on or around 19th May, 2022. (Source: Chittorgarh.com)
Link Intime India Private Limited is the registrar for this IPO.
The dates are yet to be decided.
You can read more about Delhivery Limited and its IPO from the company’s draft red herring prospectus (RHP) here.
