On Tuesday, shares in Delhivery Limited were floated at a premium. The opening price of Delhivery shares was Rs 493, up 1.2% from the offer price of Rs 487 per share. The Delhivery share opened on the NSE at Rs 495.2, up 1.7% from the higher end of the IPO price.
The IPO for Delhivery, the most profitable and rapidly expanding fully integrated logistics company, was held between May 11 and 13. The pricing range was fixed at Rs. 462 to Rs. 487 per item. The company wanted to raise Rs 5,235 crore from its public offering at the top of the price range.
However, during the subscription period, investors' interest in the Delhivery IPO was subdued. According to the data available at NSE, the public issue was booked 1.63 times. 10.17 crore shares were offered in the Delhivery IPO, but there were only 6.25 crore shares available. Analysts cited high valuation and an unstable stock market as the causes of the limited interest in the Delhivery IPO. The overall subscription rate for the issue was 1.63. A 2.66 times subscription was made to the quota set aside for qualified institutional buyers (QIBs). Retailers, qualified employees, and non-institutional investors (NICs) each received 30%, 57%, and 27% of the total subscriptions, respectively.
“We believe the cause for low subscription was investors anxiety about company operation continuous losses on books and followed by aggressive IPO prices," said Prashanth Tape, vice president (Research), Mehta Equities Ltd.
If we look at a valuation based on annualized FY22 statistics, the IPO is priced at EV/Sales of 4.8x and Price to Book value of 5.2x at the upper price range of the IPO, according to Yash Gupta, equities research analyst, Angel One Ltd. The company reported an EBITDA loss of Rs 232 crore and a net loss of Rs 891 crores during the third quarter of FY22."
"Delhivery shares were listed at a 2% premium to the initial public offering prices. They are currently trading at a premium of 5% to 7%. Given the volatility of Indian benchmarks, the company's start is respectable. According to Mohit Nigam, head of PMS at Hem Securities, "We also believed before the debut that the logistic startup is not intended for listing gains but can reap rewards in the long term considering the improvement in their financial health."