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Supply chain company Delhivery's initial share public offering (IPO) got subscribed 21% on the first day of subscription on Wednesday. The share sale received bids for 1,32,64,410 shares against 6,25,41,023 shares on offer. Delhivery's IPO has a price range of 462-487 apiece.

The part meant for Retail Individual Investors (RIIs) got subscribed 30%, while Qualified Institutional Buyers (QIBs) received 29% subscription and non-institutional investors 1%.

The size of the IPO has been cut to 5,235 crore from 7,460 crore planned earlier. 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. On Tuesday, Delhivery raised  2,347 crore from anchor investors.

As per market observers, Delhivery shares' premium (GMP) has come down to 2 in the grey market today, from 7 yesterday. Shares of the company are expected to list on stock exchanges BSE and NSE on Tuesday, May 24, 2022.

“We recommend Subscribe rating from a long term perspective given it being largest and fastest growing 3PL express parcel delivery player, having unified infrastructure network, vast amount of data intelligence and R&D, experienced professional management team and strong relationship with diversified customer base," said Yes Securities.

Proceeds of the fresh issue will be used towards funding organic growth initiatives, funding inorganic growth through acquisitions and other strategic initiatives and for general corporate purposes. Delhivery provides a full range of logistics services, including express parcel delivery, heavy goods delivery and warehousing.

“Delhivery has shown strong growth and built a recognisable brand in a segment marred by intense competition and low barriers to entry. With a pan-India presence and diversification into other segments (LTL, omnichannel etc), the management seeks to utilise the scale to further optimise, crossutilise its network and lower costs. However, we await further progression on path of achievement of positive cash flows," said ICICI Securities.

 

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