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Delhivery IPO opens today – should I sign up? This is the opinion of expert Anil Singvi


The initial public offering (IPO) of Delhivery Limited, a logistics firm and supply chain, will open for subscription on Wednesday, May 11, 2022. An IPO of 5,235 crore will close on May 13, 2022 for an IPO of Rs 462-487 per share.

The company has to collect up to 4000 crore OFS (offer for sale) and 1235 crore fresh issue through IPO. Investors like Deli CMF Pte. Ltd, CA Swift Investments, SVF Doorbell (Cayman) Ltd, Times Internet Limited, Kapil Bharati and Mohit Tandon are also involved in OFS.

Net income will be used to fund organic growth initiatives, as well as through acquisitions and other strategic initiatives along with other overall corporate goals. Morgan Stanley India, Kotak Mahindra Capital, BofA Securities India, Citigroup Global Markets are the leading executives of Book Running.

As the subscription to the IPO Delhivery begins today, Zee Business Editor-in-Chief Anil Singw singled out the pros and cons of the company and advised to avoid this problem.

Pros: Delhivery’s revenue growth has been impressive over the past three years, and demand for logistics and supply chains is growing. In addition, freight corridors and infrastructure have been created for both automobiles and railways. The company will receive Rs 6,500 in cash after the IPO and the young leadership.

Cons: Despite high earnings, the company is unprofitable, and no unprofitable company that brings on the stock exchange, does not trade on the green, whether it be, for example, Zomato or Paytm. Negative cash flow and costly valuations are two other major factors Syngvy suggested avoiding this IPO.

Yesha Shah, head of equity research at Samco Securities, said India’s logistics business is poised for huge expansion, and Delhivery has promising growth potential. Although the company’s revenue is growing rapidly, the company’s EBITDA and cash flow remain negative.

We expect the company to continue to experience growing cost pressures, at least in the short term, due to rising fuel costs. It also seems that this issue will be highly valued at a price-to-sales ratio of 5.5 times the annual revenue for 22 fing. compared to the listed analogues.

Given the current environment of rising interest rates, when valuing companies with high growth rates around the world are taking, expensive delivery estimates are a cause for concern. So we have an AVOID rating for this IPO.

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