Delhivery IPO makes flat debut on bourses; lists at Rs 495 per share on NSE; what should investors do?

Delhivery IPO listing price: Shares of Supply chain firm Delhivery made a flat debut on exchanges on Tuesday. The counter was listed at Rs 493 per share on the BSE. This is a gain of Rs 6 or 1.23% on the upper band of the issue price of Rs 487 apiece. On the NSE, the shares were listed at 1.68% premium or Rs 8.20 higher to Rs 495.20 per share against the issue price.  

Earlier, Delhivery IPO was subscribed 1.63 times on the last day of subscription on May 13. On the final day, the offer received bids for 10,17,04,080 shares against 6,25,41,023 shares on offer, as per NSE IPO data. Qualified institutional buyers drew 2.66 times subscription, while the portion for retail individual investors was subscribed 57 per cent and that for non-institutional investors 30 per cent. 

Delhivery had raised Rs 2,347 crore from anchor investors. The company had decided to allocate a total of 4,81,87,860 equity shares to anchor investors at Rs 487 apiece, which is also the upper end of the price band, aggregating the transaction size to Rs 2,346.74 crore, according to a circular uploaded on the BSE website. 

Starting shortly! Join us in the listing ceremony of Delhivery Limited. https://t.co/xZCpw0d3SF

— NSE India (@NSEIndia) May 24, 2022

The public issue, with a price band of Rs 462-487 a share, opened for subscription on May 11 and concluded on May 13. 

The company aims to use proceeds of the fresh issue towards funding organic growth and inorganic growth through acquisitions and other strategic initiatives and for general corporate purposes.  

#IPOListing

आज होगी Delhivery की लिस्टिंग, इश्यू प्राइस ₹487/शेयर

डिस्काउंट या प्रीमियम पर होगी लिस्टिंग?

लिस्टिंग के बाद लॉन्ग टर्म इन्वेस्टर्स क्या करें?

जानिए Delhivery की लिस्टिंग पर अनिल सिंघवी की राय...

@AnilSinghvi_ #DelhiveryIPO #ipoalert pic.twitter.com/G0gckTmh3Q

— Zee Business (@ZeeBusiness) May 24, 2022

The public issue comprised a fresh issuance of equity shares worth Rs 4,000 crore and an offer for sale (OFS) component of Rs 1,235 crore by existing shareholders. 

What should investors do?  

Zee Business Managing Editor said the logistics solutions provider's stock is likely to list near or below upper band of the issue price at Rs 487 per share. He suggested that only long-term investors should buy if the shares list at massive discount.  

Earlier, speaking about the negatives of the company, he had said despite high revenues, it is a loss-making company, and no listed similar company is trading in the green, be it Zomato or Paytm for instance. Negative cash flow and expensive valuations are the other two major factors, the market guru had said.  

Santosh Meena, Head of Research, Swastika Investmart Ltd, said the company’s tepid listing can be attributed to the current market conditions and the loss-making nature of the company.

The company has a good track record of execution built on its proprietary technology and has scaled up significantly since its incorporation in 2011 to emerge as the largest fully-integrated logistics player in the country, said Meena. He was of the view that the runway of opportunity appears good given India’s long-term growth prospects and the crucial role logistics plays when it comes to commerce.

"However, the logistics industry is extremely competitive and the company is yet to turn profitable.So, new investors must wait and watch the strategy of the company post listing and should only invest once the concrete plans to turn profitable are laid down.  Those who applied for listing gains can maintain a stop loss of Rs. 460," the expert added.