On Tuesday, shares in Delhivery Limited were floated at a premium. The stock of Delhivery opened at Rs 493, up 1.2 percent from the offer price of Rs 487. On the NSE, the Delhivery share opened at Rs 495.2, up 1.7% from the initial public offering price.
Between May 11 and 13, Delhivery, the largest and fastest-growing fully-integrated logistics company by revenue, went public. The pricing range for each item was established between Rs 462 and Rs 487. The company hoped to generate Rs 5,235 crore from the public offering at the top of the price range.
During the subscription period, however, the Delhivery IPO received a lukewarm response from investors. According to the NSE data, the public offering was booked 1.63 times. The Delhivery IPO attracted offers for 10.17 crore shares, compared to the 6.25 crore available. The poor interest in the Delhivery IPO, which was generally subscribed 1.63 times, was attributed to pricey pricing and a volatile stock market, according to analysts.
Qualified institutional buyers (QIBs) quota was oversubscribed 2.66 times. Non-institutional investors (NIIs), retailers, and qualified employees each received 30%, 57%, and 27% of the total subscriptions, respectively.
“We believe the low subscription was due to investors’ concerns about the business’s persistent losses on books, as well as aggressive IPO prices,” says the company “Mehta Equities Ltd vice president (Research) Prashanth Tapse
“If we look at a valuation based on annualised FY22 data, the IPO is priced at EV/Sales of 4.8x and Price to Book value of 5.2x at the top price band of the IPO,” Yash Gupta, equities research analyst, Angel One Ltd, stated on the valuation of the Delhivery IPO. The company recorded a net loss of Rs 891 crores for 9MFY22, with an EBITDA loss of Rs 232 crore.”
“Delhivery shares have been listed at a 2% premium to the issue price. And are currently trading at a premium of 5-7 percent. Given the volatility of Indian benchmarks, the company has had a strong start. According to Mohit Nigam, head, PMS, Hem Securities, “we concluded that the logistic startup was not aimed for listing advantages but may reap rewards in the long term considering improvement in their financial condition.”
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