Delhivery IPO subscribed 1.63x on QIB support, Venus Pipes subscribed 16.3x

Trends



Logistics major Delhivery Rs 5,235-crore initial public offering (IPO), the second largest of the year, managed to sail through due to strong support by institutional investors. The so-called qualified institutional buyer (QIB) portion of the IPO garnered 2.66 times subscription, with bids worth Rs 4,385 crore. In addition, QIBs also invested Rs 2,346 crore through the anchor book.


Other investor categories, however, failed to garner full subscription. The retail portion was subscribed 26 per cent and the high-networth individual (HNI) portion garnered 56 per cent subscription. The undersubscribed shares will be allotted to QIBs. The IPO required at least 75 per cent subscription from institutional investors.





Delhivery’s IPO coincided with a sharp selloff in the secondary market. The benchmark Nifty has dropped nearly 8 per cent this month.


Delhivery’s IPO was seen as a test for investors’ appetite for fast-growing technology companies. A successful listing of Delhivery could once again pave the way for IPOs of those waiting in the wings such as Pharmeasy and Oyo. Globally, only 2-4 tech companies have managed to launch $500 million-plus IPOs this year.


The price band for the IPO was set at Rs 462-Rs 487 per share. At the top-end, Delhivery will have a market cap of Rs 35,284 crore on a post-diluted basis. Through the IPO, the company has raised Rs 4,000 crore of fresh capital. The remaining Rs 1,235 crore will be an offer for sale (OFS) investors, which include private equity firms Carlyle and Softbank.


“At the upper band of its IPO price of Rs 487, Delhivery is valued at 2.4 times FY24 EV/Sales. This in our opinion is an attractive valuation when compared with peers Blue Dart (3.1X FY24 EV/Sales) and TCI Express (4.1X FY24 EV/Sales),” broking firm Ventura said in a note.


Venus Pipes IPO subscribed 16.3 times


Venus Pipes & Tubes’ IPO garnered 16.3 times subscription. Retail portion of the IPO was subscribed 19 times, HNI portion was subscribed 15.6 times and QIB portion was subscribed 12 times. The company is a manufacturer of stainless steel pipes and tubes. Through the IPO, Venus Pipes raised Rs 165.4 crore in fresh capital.

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