ETtech IPO Watch: Five key takeaways from Delhivery’s draft prospectus

A DRHP is a publicly available document that any company planning to raise money from the public must file with the markets regulator. It outlines critical information and details about its business operations and financials, its promoters, reasons for raising money, how it will use the funds, the risks involved with investing in the company, and so on.

Here are five key takeaways from Delhivery’s DRHP:

Issue size: The company said it will raise 5,000 crore by issuing fresh shares and Rs 2,460 crore through an offer for sale (OFS), in which some existing investors will dilute their holdings. The company is
seeking a valuation of around $5-5.5 billion for its listing, as ET reported earlier.

Pre-IPO round: The company said in September that Lee Fixel, former partner at New York-based investment firm Tiger Global, had
invested a total of $125 million through his fund Addition, partly through a secondary purchase of shares from China’s Fosun. The Chinese fund sold 1.32% of its 3.8% stake in the company, after which it was valued at $4 billion, ET
reported last month.

Selling shareholders: Carlyle, SoftBank and Times Internet are listed as selling shareholders in the DRHP. Times Internet is part of Times Group, which also owns ETtech. Kapil Bharati, Mohit Tandon and Suraj Saharan, who are among the five founders of Delhivery, will also sell shares in the OFS.

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Financials: The company saw its revenue jump significantly amid the pandemic, though it continues to make losses. It reported revenue of Rs 3,646.5 crore in FY21 compared to Rs 2,780 crore the previous year. In FY21, its net loss was at Rs 415.7 crore, up from Rs 269 crore in FY20. For the quarter ending June 2021, Delhivery’s revenue was Rs 1,317 crore with a loss of over Rs 129 crore.

The company’s unaudited consolidated revenues stood at Rs 4,644.38 crore and losses at Rs 595.3 crore in FY21. In the first quarter that ended June 30, 2021, the company saw its consolidated revenue grow to Rs 1,553.9 crore, with a loss of Rs 190.2 crore.

These consolidated numbers include income from its subsidiary Spoton Logistics, which it acquired in August in a $300-million all-cash deal.

Proceeds of the issue: According to its DRHP, Delhivery will spend around Rs 2,500 crore to fund organic growth initiatives and Rs 1,250 crore to fund inorganic growth through acquisitions and other strategic initiatives. It will use the remaining amount for general corporate purposes.

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