Please refer to important disclosures at the end of this report
1
Delhivery is the largest and fastest growing fully integrated logistics services
player in India. Company has a reach of 17,488 pin codes, having infrastructure
of 14.2 million₹ square feet with more than 3,836 number of delivery points.
Company offers five types of transportation services- Express Parcel services, Part
Truck Load services, Truck Load services, Supply chain services and Cross Border
services. Express Parcel services contribute more than 62% of FY2021 revenue
and Part Truck Load services contribute 11.5%. Company having total client base
of 23,113 majority of which includes e-commerce marketplaces etc.
Positives: (a) Delhivery provides integrated solutions for logistics, with a market
share of 22% in express parcel. (b) Having In-house logistics technology stack to
meet the dynamic needs of modern supply chains. (c) Delhivery operates a pan-
India network and provides their services in 17,488 Pin codes which represents
more than 90% of India Pin codes.
Investment concerns: (a) Any slowdown in e-commerce business in India will
impact Delhivery revenue as 62% of FY2021 revenue comes from Express Parcel
services. (b) Dependency on top-5 customers, which contributes 41% of company
revenue. (c) Company recently launched Delhivery Direct, which is a C2C
shipping service, it may be difficult for the company to gain market share due to
competition.
Outlook & Valuation: Based on annualized FY22 numbers, the IPO is priced at
EV/Sales of 4.8x and Price to Book value of 5.2x at the upper price band of the
IPO. For 9MFY22 company has reported EBITDA loss of ₹232 crores and Net
loss of ₹891 crores. In the Indian markets, no other peer group has same
business model as Delhivery. Company has reported good revenue growth of
82% in 9MFY2022 and it is expected that company may turn EBITDA positive by
FY2022 end. Given the expensive valuation, we are assigning a NEUTRAL
recommendation to the Delhivery IPO
Exhibit 1: Key Financials
Y/E March (₹ cr)
FY20
FY21
9MFY21
9MFY22
Net Sales
2,781
3,647
2,644
4,811
% chg
68.1
31.1
82.0
Net Profit
(268.7)
(415.7)
(297.5)
(891.1)
% chg
(84.9)
54.7
199.5
EBITDA (%)
1.3
1.9
2.4
(9.0)
EPS
(5.2)
(8.5)
(5.8)
(15.4)
P/E (x)
-
-
-
-
P/BV (x)
9.9
11.0
10.7
5.2
EV/EBITDA
853.1
446.1
370.8
-
EV/Sales
11.0
8.4
8.7
4.8
Source: Company, Angel Research
NEUTRAL
Issue Open: May 11, 2022
Issue Close: May 13, 2022
QIBs 75%
Non-Institutional 15%
Retail 10%
Promoters 0.0%
Public 100.0%
Offer for sale:₹1,235 cr
Issue Details
Face Value: ₹1
Present Eq. Paid up Capital: ₹21.7cr
Post Issue Shareholding Pattern
Fresh Issue: ₹4,000 cr
Issue size (amount): ₹5,235 cr
Price Band: ₹462-487
Lot Size: 30 shares
Post-issue mkt.cap:
₹33,678*– 35,284cr**
Promoter holding Pre-Issue: 0%
Promoter holding Post-Issue: 0%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Yash Gupta
[email protected]
DELHIVERY LIMITED IPO
f
IPO Note | Logistics
May 9, 2022
DELHIVERY LIMITED| IPO Note
May 09, 2022
2
Company background
Delhivery was originally incorporated as “SSN Logistics Private Limited”, in
2011. Delhivery is largest and fastest growing fully integrated logistics services
player in India by revenue as of FY2021. Company was founded in Gurgaon
by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan, and Kapil
Bharati. The company is a professionally managed company and does not have
an identifiable promoter in terms of SEBI ICDR Regulations and the Companies
Act.
Delhivery Limited aims to build the operating system for company Delhivery
business is guided by 3 operating principles a) People-centricity: Their
infrastructure, network and technology enable them to solve supply-chain
problems that affect millions of people every day. b) Growth through
partnership: Systemic change requires cooperation and collaboration. c)
Efficiency, always: Saving money for their customers allows them to do more
with what they have. They strive relentlessly for efficiency and for new ways to
reduce costs throughout the supply chain. For example, their cost of 1 kg parcel
from Delhi to Mumbai has decrease by 15% in last 2 years.
Key Points
1) As of December 2021, Delhivery covers 17,488 pin codes in India,
nearly 90.6% of total pin codes in India.
2) As of now company has shipped more than 1.2 Bn express parcels in
India, more than 1.1 Mn tons of PTL freight shipped and more than
160K truck load trips completed by the company.
3) Company having market share of 22% in overall e-commerce parcel in
Q3FY22.
4) Company having more than 11,000 network partners and having total
team size of 86,000 employees.
5) Company having total client base of 23,113 majority of which includes
e-commerce marketplaces, direct-to-consumer e-tailers. Company
focuses on the B2C business model but recently company has also
launched C2C services.
6) As of 31st December 2022, company having logistics infrastructures of
14.27 Mn Sq.Ft and having 8000 trucks out of which 300 trucks owned
by the company.
DELHIVERY LIMITED| IPO Note
May 09, 2022
3
Exhibit 1: Revenue from Operations
9MFY2022
FY2021
FY2020
Business verticals
Sales
(₹ in Cr)
% to Total
Sales
(₹ in Cr)
% to Total
Sales
(₹ in Cr)
% to Total
Revenue from
Express Parcel services
2,959
61.5%
2,551
62.3%
1,929
69.4%
Part Truck Load services
864
18.0%
384
11.5%
231
8.3%
Truck Load services
185
3.9%
214
6.4%
366
13.2%
Supply chain services
351
7.3%
390
11.7%
215
7.7%
Cross Border services
264
5.5%
96
2.9%
34
1.2%
Sale of traded goods
187
3.9%
11
0.3%
6
0.2%
Total
4,811
100.0%
3,647
100.0%
2,781
100.0%
Source: Company, Angel Research
Revenue from Express Parcel services has increased from ₹1,929 crores in
FY2020 to ₹2,959 crores in 9MFY2022 and contributes 61.5% of total revenue.
Revenue from Part Truck Load services has also increased significantly in last the
3 years, in 9MFY2022 it contributes 18% of companies total revenue and after
the acquisition of Spoton, we expect PTL will be a growth trigger for the
company.
Exhibit 2: Operation Performance
9MFY2022
FY2021
FY2020
FY2019
PIN code reach
17488
16677
15875
13485
Infrastructure (Mn sq ft)
14.2
12.23
9.85
5.96
No. of gateways
82
88
83
73
Rated Automated Sort Capacity
(in million parcels/day)
3.7
2.62
2.26
1.58
Number of delivery points
3836
3382
2973
2258
Team size
86184
53086
40416
28830
No. of Active Customers
23113
16741
7957
4867
Source: Company, Angel Research
Company has shown a good improvement in its operation performance. Pin
code reach has increase by 29.7% in last 3 years to 17,488 pin codes in India.
Infrastructure in million square feet has increase by 138% at 14.2 Mn sqft.
Number of active customers has also increase from 4,867 to 23,113 in last 3
years.
DELHIVERY LIMITED| IPO Note
May 09, 2022
4
Issue details
Delhivery Limited is raising ₹5,235 cr out of which fresh issue is of ₹4,000 cr
and OFS of ₹1,235 crores in the price band of ₹462-₹487 per share.
Exhibit 3: Pre & Post Shareholding
(Pre-issue)
(Post-issue)
Particular
No of shares
%
No of shares
%
Public Selling Shareholders
25,56,61,300
39.8%
23,02,96,714
31.8%
Public Others
38,67,04,527
60.2%
49,42,04,637
68.2%
Total
64,23,65,827
100.0%
72,45,01,351
100.0%
Source: Company, Angel Research
Objectives of the Offer
Organic growth initiatives (₹2,000Cr).
Inorganic growth funding (₹1,000Cr).
General corporate purposes (₹1,000Cr).
Key Management Personnel
1. Deepak Kapoor is the Chairman and Non-Executive Independent
Director of the company. He was previously associated with
PricewaterhouseCoopers Pvt Ltd as Chairman and Chief Executive
Officer.
2. Sahil Barua is the Managing Director and Chief Executive Officer of
the company. He has previously been associated with Bain & Company
India Pvt Ltd as Consultant.
3. Sandeep Kumar Barasia is the Executive Director and Chief Business
Officer of the company. He was previously associated with Bain &
Company India Pvt Ltd as a Vice-President (Partner).
4. Kapil Bharati is the Executive Director and Chief Technology Officer of
the company. He has previously served as Founder and Chief
Technology Officer at Athena Information Solutions Pvt Ltd and as
Senior Manager Technology at Sapient and Publicis Sapient.
5. Donald Francis Colleran is the Non-Executive Nominee Director of the
company as a nominee of FedEx. He presently holds the position of
President & CEO of FedEx Express.
6. Munish Ravinder Varma is the Non-Executive Nominee Director of the
company as a nominee of SVF Doorbell (Cayman) Ltd. He currently
serves as Managing Partner at SoftBank Investment Advisers.
DELHIVERY LIMITED| IPO Note
May 09, 2022
5
Consolidated Profit & Loss Account
Y/E March (₹ cr)
FY19
FY20
FY21
9MFY21
9MFY22
Total operating income
1,654
2,781
3,647
2,644
4,811
% chg
-
68
31
82
Total Expenditure
3,272
2,953
3,769
2,744
5,346
Freight & handling cost
1,251
2,184
2,778
2,026
3,479
Employee Benefit Expense
345
491
611
439
973
Other Expenses
1,677
278
380
280
894
EBITDA
(1,618)
(172)
(123)
(100)
(535)
(% of Net Sales)
(98)
(6)
(3)
(4)
(11)
Depreciation& Amortization
170
256
355
255
388
EBIT
(1,788)
(428)
(478)
(355)
(923)
(% of Net Sales)
(108)
(15)
(13)
(13)
(19)
Interest & other Charges
35.8
49.2
88.6
63.9
76.2
Exceptional items
-
-
41.3
41.3
-
Other Income
41.0
208.1
191.8
162.7
100.9
(% of Sales)
2.5
7.5
5.3
6.2
2.1
Recurring PBT
(1,783)
(269)
(416)
(297)
(899)
(% of Net Sales)
(108)
(10)
(11)
(11)
(19)
Tax
-
(0)
-
-
(8)
PAT
(1,783)
(269)
(416)
(297)
(891)
(% of Net Sales)
(108)
(10)
(11)
(11)
(19)
EPS
(47.2)
(5.2)
(8.5)
(5.8)
(15.4)
Source: Company, Angel Research
DELHIVERY LIMITED| IPO Note
May 09, 2022
6
Consolidated Balance Sheet
Y/E March (₹ cr)
FY19
FY20
FY21
9MFY21
9MFY22
SOURCES OF FUNDS
Equity Share Capital
1.0
1.0
1.6
1.6
21.7
Instruments entirely equity in nature
39
39
35
35
43
Other equity
3,348
3,130
2,800
2,878
5,916
Shareholders Funds
3,388
3,170
2,837
2,915
5,980
Total Loans
278
487
785
789
865
Other liabilities
13
17
22
21
41
Total Liabilities
3,680
3,674
3,644
3,726
6,886
APPLICATION OF FUNDS
Net Block
459
741
1,098
1,145
1,465
Goodwill
29
30
33
29
1,794
Financial assets
231
903
509
519
670
Non Current Assets
720
1,673
1,639
1,693
3,929
Current Assets
3,270
2,573
2,830
2,949
4,336
Sundry Debtors
215
601
595
756
892
Investments
1,130
810
708
807
1,737
Inventories
22.6
17.8
25.9
24.1
31.8
Cash & Bank Balance
1,859
1,053
1,359
1,241
1,392
Other Assets
43
90
143
121
283
Current liabilities
383
683
954
1,059
1,544
Net Current Assets
2,887
1,889
1,877
1,890
2,792
Other Non Current Asset
73
111
128
143
165
Total Assets
3680
3674
3644
3726
6886
Source: Company, Angel Research
DELHIVERY LIMITED| IPO Note
May 09, 2022
7
Consolidated Cash Flow Statement
Y/E March (₹cr)
FY19
FY21
9MFY21
9MFY22
Profit before tax
(1,783)
(416)
(297)
(899)
Depreciation
170
355
255
388
Change in Working Capital
(173)
(40)
(186)
(591)
Interest Expense
10
20
14
18
Interest Income
(32)
(115)
(90)
(45)
Share based payment expense
38
72
42
217
Fair value gain on investment
(1)
(33)
(39)
(19)
Fair value loss on financial
liabilities
1,481
9
-
300
Direct Tax Paid
(23)
(18)
(32)
2
Others
71
170
142
120
Cash Flow from Operations
(243)
5
(192)
(509)
(Inc.)/ Dec. in Fixed Assets
(157)
(249)
(189)
(567)
Payment towards acquisition
(27)
(4)
-
(1,387)
Bank deposits
111
413
388
185
Interest received
32
75
57
112
Investments
(900)
102
102
(982)
Cash Flow from Investing
(939)
338
358
(2,639)
Procees/Repayment of Borrowing
27
13
33
(138)
Dividend paid on equity shares
(9)
(21)
(13)
(17)
Repayment of lease liability
(88)
(212)
(155)
(195)
Proceeds from issue of equity
shares
-
10
1
846
Proceeds from issue of equity
instruments
2,890
-
-
2,550
Proceeds short-term borrowings
(net)
39
53
90
42
Others
-
9
-
96
Cash Flow from Financing
2,858
(147)
(44)
3,184
Inc./(Dec.) in Cash
1,676
196
123
36
Opening Cash balances
(14)
79
79
276
Closing Cash balances
1,663
276
202
311
Source: Company, Angel Research
DELHIVERY LIMITED| IPO Note
May 09, 2022
8
Financial Ratios
Y/E March
FY19
FY20
9MFY21
9MFY22
Valuation Ratio (x)
P/E
-
-
-
-
P/BV
9.2
9.9
10.7
5.2
EV/Sales
18.0
11.0
8.7
4.8
EV/EBITDA
-
853
371
-
Per Share Data (Rs)
EPS (fully diluted )
(47.2)
(5.2)
(5.8)
(15.4)
Cash EPS
(25.1)
(0.2)
(0.7)
(8.1)
Book Value
52.7
49.4
45.4
93.1
DPS
1.0
1.0
2.0
-
Number of share
64.2
64.2
64.2
64.2
Turnover ratios (x)
Asset Turnover (net)
3.6
3.9
3.4
4.6
Receivables (days)
47.4
78.9
78.3
67.7
Inventory Days
20.5
10.9
10.7
6.5
Payables (days)
46.2
45.7
67.3
61.7
Working capital cycle (days)
21.7
44.2
21.6
12.5
Source: Company, Angel Research
DELHIVERY LIMITED| IPO Note
May 09, 2022
9
Research Team Tel: 022 - 40003600 E-mail: [email protected] Website: www.angelone.in
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