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Supply chain company Delhivery has set a price band of 462-487 a share for its 5,235-crore initial public offering (IPO), which will open for subscription on Wednesday, May 11, 2022 and will conclude on May 13. The bidding for anchor investors will open on May 10.

The public issue now comprises fresh issuance of equity shares worth 4,000 crore and an Offer for Sale (OFS) component of 1,235 crore by existing shareholders.

As per market observers, Delhivery shares premium (GMP) have slipped to 10 in the grey market today. Shares of the company are expected to list on stock exchanges BSE and NSE on Tuesday, May 24, 2022.

At the upper end of the price band, the company is valued at 35,284 crore. The size of the IPO has been cut to 5,235 crore from 7,460 crore planned earlier.

"Delhivery's revenue growth has been robust with 49% CAGR from FY19-21. However, losses have risen in similar fashion. The offer is priced at almost 5.5x mcap-to-Revenue based on post fresh issue and annualized metrics of 9MFY22. The valuations seems to be in-line with peers but the company being loss-making makes the issue look expensive. Dicey market sentiments and concern of investors towards loss-making start-ups may dampen the interest," said Abhay Doshi, founder, UnlistedArena.

Proceeds of fresh issue to the tune of 2,000 crore will be used towards funding organic growth initiatives and 1,000 crore for inorganic growth through acquisitions and other strategic initiatives, besides, money will be used for general corporate purposes.

Delhivery provides a full range of logistics services, including express parcel delivery, heavy goods delivery, warehousing, supply chain solutions, cross-border express and freight services and supply chain software, along with value added services such as e-commerce return services, payment collection and processing, installation and assembly services.

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