The Indian logistics market is one of the largest in the world and presents a large addressable opportunity, with direct spending of around $216 billion in Fiscal 2020. The sector is expected to grow to $365 billion by Fiscal 2026, at a CAGR of 9%.
The logistics market primarily comprises transportation and warehousing, of which transportation accounted for 70%, or $151 billion, in fiscal 2020.
India’s total logistics spending was around 14% of GDP in 2020, which is higher than countries like Germany and the U.S. where logistics spending is approximately 8% of GDP.
Delhivery Ltd, an Indian logistics and supply chain startup, recently submitted papers with the Securities Board of Exchange to raise ₹7,460 crores via an initial public offering.
The IPO comprises a fresh issue of shares worth ₹5,000 crores and an offer for sale of up to ₹2,460 crores worth of shares by promoters and shareholders. According to certain sources, the Delhivery co-founders will also participate in the offer for sales.
The company plans to utilize ₹2,500 crores of the net proceeds towards funding organic growth initiatives. Further, Delhivery will employ ₹1,250 crores for funding inorganic growth through acquisitions and other strategic initiatives. The remaining amount will be used for other corporate purposes.
Company Profile
Delhivery Ltd is one of the largest and fastest-growing fully-integrated logistics services in India. The company provides supply chain solutions to a diverse base of 21,342 active customers such as e-commerce marketplaces, direct-to-consumer retailers and SMEs across multiple verticals such as FMCG, consumer durables, consumer electronics, lifestyle, and automotive & manufacturing.
The company has a nationwide network, servicing 17,045 PIN codes as of 30th June. The network infrastructure includes 124 gateways, 20 automated sort centres, 83 fulfilment centres, 35 collection points, 24 returns processing centres, 249 service centres, 120 intermediate processing centres and 2,235 direct delivery centres.
Key Numbers
For fiscal 2021, Delhivery reported a total income of ₹3,838.29 crores, against ₹2,988.63 crores a year ago. Net loss for the period widened to ₹415.74 crores from ₹268.93 crores in the previous year.
Delhivery also provides door-to-door and port-to-port express parcel and freight shipping services — from customers in India to the rest of the world and to India from other countries.
The global operation exposes the company to legal, tax and regulatory scrutiny. Non-compliance with regulatory requirements can have a negative impact on the business. The other risks include unfavourable foreign exchange rates, risks associated with non-compliance with international laws and potentially adverse tax consequences.