Delhivery’s Shares Changed Hands As Tiger Global Sells 2.80% stake Which Is Worth 20,386,688 Equity Shares.

Delhivery’s Shares Changed Hands As Tiger Global Sells 2.80% stake Which Is Worth 20,386,688 Equity Shares.

Delhivery is a provider of integrated logistics services having a national network that includes more than 18,400 pin codes. Delhivery offers a variety of services which are delivering express parcels, large items, PTL and TL freight, warehousing, supply chain solutions, cross-border express, freight services, and Supply Chain software.

According to revenue as of FY21, Delhivery is the biggest and most rapidly Expanding Provider of fully integrated logistics services in India.

Tiger Global Management, the US-based investment management firm, has completed the open market sale of 20,386,688 Equity Shares, or 2.80% of Delhivery.

The American investment management company owned 5.38% of the company previously.

A day after Tiger Global Management sold a 1.7% interest on the open market for Rs 414 crore, shares of logistics services provider Delhivery increased by more than 4% in the most recent trading session.

The stock’s closing price in the most recent session on BSE was Rs 336.4, a 3.6% or Rs 12.6 decrease from the previous close of Rs 349.95. Due to the stock’s decline, a five-day winning streak was broken.

Around a third of all Unicorn Companies in India are backed by Tiger Global, one of the most active investors in the country. According to a 2017 TechCrunch report, the company with its headquarters in New York has invested over $6.5 billion in the South Asian market since its creation, with India being one of its top three international markets. Tiger Global has made a $1 billion investment in Flipkart alone.

During the past ten years, tech giants like Google, Meta, Walmart, Microsoft, and Amazon and investors like Sequoia, Tiger Global, Accel, and Lightspeed have invested over $75 billion in India.

Though the startup sector in the country is growing, there have been relatively few exits, and a number of consumer internet companies that went public in the last two years are trading at notable discounts to their IPO prices.

In January 2023, Tiger Global Management, one of India’s most active private market investors, made no investments in any startups there, signaling a deteriorating funding crisis for the third-largest startup ecosystem in the world.

This was the company’s first month without investing in an Indian startup in two years. This occurred most recently in January 2021.

According to BSE records, the Tiger Global Management-managed venture capital funds Internet Fund III and Tiger Global Investments Fund have sold 19,288,238 and 1,098,450 equity shares, respectively. Following the sale, Internet Fund III now owns 18,605,462 equity shares or 2.55% of the total number of shares.

Following the sale, Internet Fund III now owns 18,605,462 equity shares or 2.55% of the total number of shares. On a day when the benchmark Sensex index lost roughly 142 points, Delhivery closed 1.29% higher at Rs 350.15 per share on the BSE.

With a target of Rs 370, Morgan Stanley is overweight on the Delhivery at the moment.

Leverage when operating is high. A better-than-estimated adjusted EBITDA was produced by cost minimization. Nonetheless, it noted that the revenue growth fell short of expectations.

Delhivery’s net loss increased to Rs 195.7 crore in the third quarter of the current fiscal year as opposed to Rs 127 crore in the same quarter last year. Moreover, revenue decreased by 9% to Rs 1,823 crore from Rs 2,019 crore year over year (YoY).

With a target price of Rs 570, global firm Jefferies has kept its Buy rating on Delhivery shares.

Because of higher gross profit and decreased other expenses, the Q3 EBITDA loss was less than expected. The management expressed optimism about extra loss reduction. In the next three to five years, they estimate express parcel growth to be less than 10%, down from the 30%+ levels observed in the past. We think that operating leverage, low e-commerce penetration, and B2B (Spoton) driven growth are being underappreciated, according to Jefferies.

The Delhivery stock currently gets a buy rating of Rs 395 from Kotak Institutional Equities.

Macquarie, an Australian brokerage, has started coverage on the provider of logistics services with a buy call. The brokerage has given the company an outperform rating and a target price of Rs 440. It sees a clear route leading to 100% returns for the stock in 3 years.

With a sustainable cost leadership position, favorable unit economics, and no external funding requirements, the brokerage has predicted a four-fold increase in volume by FY30.

The brokerage stated in a report that “over the next few quarters, we forecast a low-growth operating environment due to tighter funding conditions for e-commerce platforms.” According to Macquarie, the bear case valuation would be Rs 215, a 30% decrease from the current price, if the low-growth operating period were to become the new norm.

The company claims to have completed more than 1.7 billion shipments since its founding and currently collaborates with over 28,000 clients, including major and minor players in the e-commerce space, SMEs, and other businesses and brands.

By its comprehensive offering of integrated services created to address changing client needs, the logistics startup has also recently increased its connection with many D2C brands, like the home décor company Nestasia and casual clothing retailer The Souled Store.

Supply chain solutions given by the company, along with warehouse and transportation solutions, are designed to offer complete and integrated multi-channel order fulfillment solutions and improved supply chain visibility through a single, technology-enabled platform.

edited and proofread by nikita sharma