Delhivery to take LIC route for IPO and reduce issue size?

By Team Newsable | First Published May 2, 2022, 4:33 PM IST

The logistics firm has made up its mind to reduce its issue size the way LIC did taking into account the volatility of the stock market.

Logistics firm Delhivery could bring its Initial Public Offering this month. But reports are now emerging that Delhivery may take the LIC route for its IPO. The logistics firm has made up its mind to reduce its issue size the way LIC did taking into account the volatility of the stock market.

Earlier, the size of Delhivery's IPO was Rs 7,460 crore. This may now be scaled down to Rs 5,500 crore. The Gurgaon-based startup held a board meeting on Saturday to discuss whether it should go ahead with an IPO this month.

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Sources familiar with the matter said the board has approved the plan and the offer is likely to be launched after the LIC IPO subscription window closes on May 9.

A person familiar with the matter said, "The idea is to open the subscription window after LIC so that institutional investors can finalize the allocation for Delhivery's IPO based on the allocation received for LIC."

Delhivery's IPO was cleared by SEBI in January but weak market sentiment forced the company to postpone the share sale.

Delhivery had earlier planned to issue new shares worth Rs 5,000 crore and sell off Rs 2,460 crore worth of shares from existing shareholders. Company sources said that the firm may revise it considering the reduction in the size of the offer.

According to the company's draft red herring prospectus, the company's largest shareholders are SoftBank Holding with a 22.78 per cent stake, Nexus Ventures with a 9.23 per cent stake and CI Swift Holdings (Carlyle) with a 7.42 per cent stake. Kapil Bharti holds 1.11 per cent, Mohit Tandon 1.88 per cent and Suraj Saharan holds 1.79 per cent of the company.

Earlier this year, Delhivery co-founder Sahil Barua said that the company want to go public when it is well understood. The IPO bankers are Morgan Stanley, BofA Securities, Citigroup and Kotak Mahindra Capital.

According to reports, the company intends to will utilise 25% of the proceeds from the IPO for funding inorganic growth through acquisitions and investments. Another 25 per cent will be utilised for general corporate purposes. Half the earnings will be used for financing organic initiatives.

Also Read: LIC IPO: You need Demat account to participate; here's how to open it

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