Delhivery IPO size cut down by a third

Next Week, leading logistics and supply chain startup Delhivery is all set to go for an initial public offering (IPO). The delivery firm intends to raise ₹5,235 crores via its Initial Public Offering. Originally, Delhivery had planned to raise ₹7,460 crores but later decided to decline the issue size by a third. Delivery slashed its issue size because of the current volatile equity market conditions and the ongoing IPO of Life Insurance Corporation (LIC), which is the biggest Initial Public Offering in the history of the Indian Stock Exchanges.

In its press conference, Delhivery stated that existing shareholders in the delivery startup believed the valuation was attractive and wanted to extend their association with the company a bit further.  

Equity research analyst at Angelone, Yash Gupta, informed that Delhivery and its shareholders made the right call as the ongoing ₹21,000 crores LIC IPO would eat into the liquidity of the investors. Besides, this would also increase the cash reserve ratio (CRR) required by the Reserve Bank of India (RBI).

Gupta said, “It will be difficult to predict the scenarios [if Delhivery went ahead with ₹7,460 crore IPO] but as the IPO size increases we have seen that it becomes difficult for the companies to get subscriptions and liquidity in the market will be more after listing. So we believe that it is a good decision by the company to decrease the overall issue size.”