New Age Business Delhivery Shares On Sale: Softbank May Sell ₹600 Crores Via Block Deals.

According to reports, Japanese multinational giant Softbank Group plans to sell shares valued at ₹ 600 crores in Delhivery through block sales on Wednesday. Citigroup has been considered to be the deal’s broker. Softbank may have taken some profits off the table as a result of the stock’s comeback and high gains in February.

The conglomerate may look at raising the size if it gets proper demand. The expected discount to the current market price for the shares is between three and five percent. On the NSE, shares of the logistics services company closed 0.1% down at Rs 344.80.

The performance of Delhivery.

Delhivery’s stock increased by almost 15% in February. This is the stock’s second time with double-digit gains since listing in June of last year. If the performance in February is some signal, new-age digital businesses‘ shares, like Delhivery, are emerging to be the rising heroes after suffering in the backbenches for several months. In times that witnessed extreme volatility in domestic stocks and negative returns on the Nifty50 and Sensex, shares of Delhivery have managed to swim against the flow.

On the BSE, the stock climbed 1.69 percent to a high of Rs 350 on Wednesday. Versus a two-week average of 1.12 lakh shares, Delhivery saw 2.81 crore shares traded until midday. On the NSE, 10,73,307 Delhivery shares were traded.

Informatics about SoftBank.

As of December 31st, Softbank, from its subsidiary Svf Doorbell (Cayman) Ltd., owned the entire 18.42% stake in the logistics company and new-age business Delhivery, making it the only shareholder open to the public. Softbank owned more than 22% of Delhivery before its IPO. SoftBank Group Corp of Japan reported a quarterly loss recently, as its massive Vision Fund investment subsidiary lost money for the fourth consecutive quarter, heightening emphasis on when markets would recover sufficiently to allow it to sell some assets.

The business structure of Delhivery.

One of the largest logistics companies in India and categorized under new-age entrepreneurial ideas, Delhivery offers full-stack solutions for the entire value chain. Tiger Global Management, an American investment management business, sold a 1.7% interest in Delhivery on the open market last week for Rs 414 crore. Tiger Global, through its venture capital business, owned 4.68% of the company as of the end of December.

Past stats about Delhivery.

Since its first public offering on the local bourses on May 24, 2022, Delhivery has provided a negative return of 37%. The stock has declined significantly since reaching an all-time high of 708.45 on July 21, 2022. At the end of January this year, it reached a record low of ₹291. The stock has dropped 40% in the previous six months but has recovered 12% in the last month. The stock has gained 1% in a week, compared to a 1.6% drop in the BSE benchmark Sensex.

The Gurugram-based logistics services company recorded a net loss of 196 crores for the October-December quarter of the current fiscal (Q3 FY23), compared to a loss of 126 crores in the comparable period the previous year. The logistics company’s income from operations fell 9% to 1,823 crores from 1,995 crores the previous year.

Revenue from the partial truckload freight category fell to 277 crores in the quarter that ended December 2022, from 293 crores in Q2 FY23. Income from Delhivery’s Express Parcel services reached ₹1,200 Cr in Q3 FY23. Brokerages have expressed conflicting feelings about Delhivery shares following the release of the October-December quarter results.

According to global stockbroker Jefferies, Delhivery’s Q3 EBITDA loss was lower than expected since gross profit was stronger and other expenses less. The management voiced optimism in further lowering losses. They expect current price drivers will result in less than a 10% express parcel increase over the next 3-5 years, as opposed to the 30%+ levels marked in the past, the brokerage added, retaining its ‘Buy’ call on the company with a target price of 570 per share.

Analysts at Morgan Stanley reduced the target price of the Delhivery stock to 370 per share while maintaining an ‘overweight’ rating. According to the brokerage, higher operating leverage and cost-cutting efforts resulted in higher-than-expected Adjusted EBITDA.

Kotak Institutional Equities recently reduced its service Ebitda projection for logistics carriers by 3% for FY24-FY25, net of 5-6% lower revenues and a 40-50 bps increase in margin.

The last call.

Recently, billionaire Jack Ma left another new-age business Paytm. Let’s see what happens in the future of these new-age businesses. 

edited and proofread by nikita sharma