Delhivery Success Story: India’s prominent courier services, logistics, and supply chain solutions company
Even while logistics have always been a vital sector for any country, including India, before Delhivery was established, the business had never witnessed such a revolutionary change.
One of the country’s top participants in the logistics sector right now is Delhivery. When it raised $413 million in a Series F round headed by SoftBank Vision Fund, Carlyle Group, and Fosun International in 2019, Delhivery became a unicorn. At that time, it was worth $1.5 billion. Presently, Delhivery has valued at $4.77 Bn.
Delhivery is a well-known provider of supply chain management, logistics, and courier services that is passionate about working with both people and corporations. It’s an Indian company established in May 2011. Its headquarters in Gurugram, Haryana, provides many services, like last-mile delivery, transit and third-party warehousing, reverse logistics, payment collection, vendor-to-customer shipping, and more.
Times Internet Ltd., which bought a minority investment in the company in June of last year, is the company’s backer.
The company aims to provide the best service possible without missing opportunities to address customer issues. Fulfilment, omnichannel, and data services are its three main tasks.
With the aid of its special infrastructure, partnerships, engineering, and technological prowess, Delhivery is upending India’s logistics sector.
Delhivery’s 10,000+ customers benefit from unmatched cost-effectiveness and pan-India coverage. The company’s vision is to reduce time and distance, which drives its aim of shrinking the world for its users. It is quickly becoming one of the top players in the supply chain and logistics industry because of its well-thought-out business plan. It can be said that Delhivery is one of the courier and logistics companies that has opened up new possibilities for product delivery. Additionally, Delhivery is motivated by emphasising their customers and providing them with high-quality items, which helps to establish the brand’s credibility.
With the implementation of GST, the country’s about $160 billion logistics sector is predicted to increase by an estimated CAGR of 10% and reach $215 billion in the next two years. However, most of the market was fragmented into unorganised companies, and Delhivery’s entry may be described as a phenomenon that completely changed the sector and the way it operates.
With over 1400 usable pin codes on their list and 19,990+ square feet of warehouse space in Delhi and Bangalore, this is where Delhivery has its greatest reach.
Along with managing its broad client base of other companies and people, Delhivery has many eCommerce companies as customers, including Flipkart, Amazon, eBay, Snapdeal, Jabong, and Healthkart.
Founders and Team
Bhavesh Manglani, Kapil Bharati, Mohit Tandon, Sahil Barua, and Suraj Saharan are the company’s founders.
Sahil Barua, a Bain & Company consultant, studied BE Mechanical Engineering at NIT Karnataka. After completing his undergraduate studies, Sahil Barua, the co-founder and CEO of Delhivery, enrolled in a PGDM programme at IIM Bangalore. Finally, Sahil decided to co-found Delhivery with the other founders.
The co-founder and CTO of the company is Kapil Bharati. He received his Btech in Mechanical Engineering from IIT Delhi and completed his undergraduate studies. After working as the technical lead for livemint.com and the blogs for Hindustan Times, Bharati joined SapientNitro as a senior manager of technology. Before co-founding Delhivery, Bharati had earlier co-founded two other businesses, 11Rupees and Contify.com.
Another company co-founder, Bhavesh Manglani, quit the business on March 29, 2021. Manglani earned his BTech in information and communication technology before enrolling in the PGDCM/MBA, Systems, Finance programme at IIM Calcutta. Before he co-founded Delhivery, Bhavesh had worked as a Manager – Usage & Revenue Enhancement, Prepaid Mobile, All India as a Product Manager at Reliance Communications and Idea Cellular Ltd.
IIT Kanpur graduate Mohit Tandon eventually joined Bain & Company after completing his undergraduate studies. He worked there as a consultant for about five years before helping to create Delhivery. Prior to his departure from Delhivery on March 29, 2021, Tandon was one of the company’s co-founders.
Suraj Saharan, a former consultant for Bain & Company, began his career as a customer service manager for ICICI Lombard before helping to launch Delhivery. Saharan graduated from IIT Bombay, earning a BTech in mechanical engineering. In addition, Saharan helped found the business.
To raise the calibre of the products offered by Delhivery is one of the projects being worked on by a team of data scientists at Delhivery, led by former entrepreneur and Facebook data scientist Santanu Bhattacharya. Suvayu Ali, a data scientist at Delhivery, kept a special check on the market of these technical matters with an algorithm.
The company has a team of 66000+ employees.
About half past eleven in the evening, Suraj and Sahil placed a takeout order from a local Gurgaon restaurant. They started chatting with the delivery person as he arrived at their door, and he started talking about the impending unemployment crisis. This prompted the founders to run to the store and speak with the manager. They soon arrived at the restaurant and talked to the proprietor, who further discussed his plans to shut down the establishment and transfer his personnel to another location. Here is where Sahil and Suraj decided to launch Delhivery, their delivery service. Yes, they hired all of them!
Business Model and Revenue Model
Delhivery is India’s top provider of supply chain services. It ranks among India’s top B2B, B2C, and C2C logistics courier service providers. The business is most well-known for the affordable shipping prices it charges for its services. Delhivery states that there are no setup fees or subscription fees!
The services provided by the company can be divided into three main departments:
1. Warehousing – Flexible warehousing across 40+ cities in India
2. Transportation – Largest pan-India reach across 19000+ pin codes and 2500+ cities
3. ECommerce – Ready integration with Shopify, WooCommerce, Magento & Opencart.
Growth and Revenue
When Delhivery was first established in Gurgaon, it had only five employees working across all departments, including accounting, product service, and delivery connections. But in a short time, the company hired more than 15,000 people across many departments, including deliverymen, account keepers, and many others.
The company states that it had a revenue of Rs 3700 crore in FY21, up from Rs 2800 crore in FY2020, and it expects to reach Rs 6000–Rs 7000 crore during the following two years. Operating income increased dramatically from Rs 2780.5 crore in FY20 to Rs 3646.5 crore in FY21.
The growth highlights of the company are as follows:
- Delhivery boasts of a collection of 85+ packing warehouses in total across the country
- It has around 24 automated sort centres
- The company has around 75+ hubs and 7,500+ partner centres
- Around 50,000 employees
- Delhivery asserts that it can process more than 15 lakh (about 1.5 million) parcels daily across 2,300 towns and cities and 17,500 pin codes in India.
All of these are made possible by its network of more than 5,000 trucks and close to 7,000 drivers. In addition, the company is constructing some of the biggest trucking terminals in the nation in prominent cities, including Delhi, Mumbai, Bangalore, Hyderabad, Kolkata, and Chennai.
To foster teamwork and employee effectiveness, the business culture wants each employee to spend at least 12 hours a week working as a delivery boy.
Delhivery shares rose by 6.34% on June 2, 2022, which closed at INR 570. It reached INR 617.70, which was an all-time high intraday. Only Nykaa’s shares rose by 1.05 per cent among the new-age tech stocks at INR 1470.95. All the other stocks of Policy Bazaar, PB Fintech, Paytm and Zomato fell recently.
Funding and Investors
Delhivery has raised $1.69 billion in investment across 15 rounds. Before its IPO on May 11, 2022, the company obtained a capital round worth $303.73 mn (Rs 2347 cr) led by 64 anchor investors, including Steadview, Tiger Global, Bay Capital, and others. According to company documents, the company distributed 48 million shares to the anchor investors for Rs 487 each.
On September 24, 2021, the company received its prior round, which was led by Addition. It has raised about $125 million as a result of this. The company earlier received funds of Rs 558 crore ($76.34 million) on September 6, 2021. Lee Fixel’s Addition LLC served as the round’s lead investor. As of May 2022, Delhivery has a $4.77 billion market value.
According to the brand’s MCA filings as of September 6, 2021, the logistics behemoth has given 146,961 Series I Compulsory Convertible Preference Shares (CCPS) to Addition LLC, priced at Rs 37,900 per share.
Delhivery IPO On October 7, 2021, Delhivery filed their Draft Red Herring Prospectus intending to raise $1 billion in an IPO transaction. By then, the firm had already acquired shareholder approval to become a public company, and it soon changed its name from Delhivery Private Limited to Delhivery Limited. The company, which had earlier planned to raise a total of Rs 7460 crore through its impending IPO, has now opted to lower that amount to Rs 5500 crore, a decrease of 26.27 per cent from what the business had originally intended.
Its IPO size was reduced due to market turbulence and the current geopolitical environment. Following a meeting with the Delhivery Board, the company decided to launch its IPO after the LIC IPO, whose subscription window closes on May 9, 2022. Later, this was moved to May 11, 2022, when Delhivery will launch its Rs 5235 crore IPO. According to sources dated May 5, 2022, the valuation that Delhivery will be aiming for with its IPO was shown as being somewhere around $5 billion.
The IPO range, scheduled to begin on May 11, 2022, was Rs. 462-487 per share. Delhivery has joined the ranks of businesses like TCI express, Bluedart, and Mahindra Logistics by being listed on the BSE and NSE as a result of this listing. Some book-running lead managers for the Delhivery IPO included Morgan Stanley, Citigroup, BofA Securities, and Kotak Mahindra Capital.
On May 11, 2022, the company launched its first IPO, which got off to the traditional start, with total subscriptions hovering around 4%. After two hours after the Delhivery IPO, only 4% of the employee share allotment had been registered and compared to a 23 per cent subscription for the retail subscription. The IPO had what can be considered a lukewarm start and appeared to lack market liquidity as it debuted soon after the big IPO round for LIC, which ended on May 9, 2022.
On the first day of its IPO, Delhivery received only 21% of the total subscribers. At the end of the day, the retail part had a 30 per cent subscription rate, while the Qualified Institutional Investors (QII) part had a subscription rate of about 29 per cent. The Non-Institutional Buyers (NIB) quota of Delhivery was just 1% subscribed, compared to the employee quota’s approximate 6 per cent.
Delhivery’s day two subscriptions were disappointing; only 23% of its shares were subscribed to, a 2% increase from Day 1’s subscription levels. At the end of Day 2, the retail section was still the most heavily subscribed, with memberships totalling 40%, while the QII portion’s subscription rate stayed the same at 29%. However, there was a gain in subscriptions for the NIB part, which rose to 12 per cent.
On the BSE, the shares were listed at Rs 493 per share, which was 1.2 per cent more than their issue price of Rs 487. On the NSE, the Delhivery shares were listed at Rs 495.2, which was 1.7 per cent more than the issue price. However, the shares continued to rise on the day of the listing, rising to Rs 537.25, or 9% more at closing on the BSE, and to Rs 536.25, or 10.1 per cent more on the NSE. On May 24, 2022, the Delhivery equities were listed on the BSE and NSE.
The very following day, it was discovered that the shares had increased by 4.73 per cent to Rs 511 on NSE. At the end of the listing day, Delhivery’s valuation, which was earlier estimated at Rs 35,283 crore ($4.55 bn) before its IPO, was at Rs 37,022 crore ($4.77 bn).
Delhivery is the first tech firm to go public in the period when negative sentiment is predominating the public listing with the listing of its shares on May 24, 2022. However, the IPO ended up being a profitable venture for its major investors. In 2019, Softbank entered the Delhivery cap ranking with 14,15,93,300 shares. The Japanese business sold 7,494,867 shares, or 5% interest, for almost 148 per cent ROI.
In contrast, Times Internet, one of the company’s early sponsors, controlled 4.92 per cent of the company’s stock and sold shares for $21 million in the Delhivery IPO, making 139X returns.
Delhivery – ESOPs
Delhivery distributed 11,614 shares worth $126.6K to its employees in 2019; it decided to increase the size of the ESOP pool that will be overseeing its $1 Bn-IPO. Later, the IPO valuation was decreased to Rs 5235 crore ($677.81 mn). It subsequently distributed 9,545 shares, each worth Rs 2,895, totalling Rs 2.84 crore, to 12 of its employees.
According to November 2021 sources, Delhivery announced the distribution of ESOPs of Rs 43.6 crore to approximately 66 employees as soon as the company submitted its DRHP for its first IPO.
According to the corporate filings, the company announced the allocation of 12,17,500 shares to more than 50 workers upon exercising their stock options.
In front of its stakeholders, Delhivery put nine items up for a vote, including the ESOP 2012, Delhivery ESOP II 2020, Delhivery ESOP III 2020, Delhivery ESOP IV 2021, Article of Associations, and other related schemes. Intriguingly, according to reports dated July 18, 2022, institutional shareholders (72% of them) voted overwhelmingly against these ESOP plans. Nevertheless, the non-public organisations and promoters’ votes at the company meeting allowed the ESOP plans to be approved.
According to SEBI rules, listed businesses are not allowed to make any new grants linked to the transfer of shares to their employees if the shareholders do not authorise the Pre-IPO ESOP schemes. Delhivery’s presentation of its ESOP plans was in accordance with this rule.
Delhivery has thus far collaborated with many organisations. One of its notable alliances will be with Volvo in August 2020 to expand its express network to encompass tractor-trailers.
According to Sahil Barua, Co-Founder of the company, “This is the first major deployment of tractor-trailers in express trucking, which is a major step for Delhivery towards getting ready for the future, towards expanding our network, and towards building our leadership position in this market further.”
Additionally, the business has a strategic alliance agreement in place with FedEx Express, which was first signed in July and will be finalised on December 9, 2021. This deal is thought to bring together
Given that Delhivery is a logistics company, it should go without saying that it faces intense competition on the market from businesses like:
- Ecom Express
- FSC (Future Supply Chain)
- Ekart Logistics
The company bought three companies as of December 8, 2021. On December 8, 2021, Delhivery made its most recent acquisition when it bought Transition Robotics, a startup based in California that is now focusing on developing Unmanned Aerial Systems (UAS) platforms and was established by Jeff Gibboney in 2011. The supply chain services unicorn will get the chance to work closely with the core drone technology, whose “regulations and use cases” are “developing in the country,” according to CTO Kapil Bharati.
Delhivery has already given shareholders bonus shares as it prepares to file its Draft Red Herring Prospectus (DRHP). During its September extraordinary general meeting (EGM), the logistics and supply chain startup announced that it would distribute fully paid up 1.68 Cr bonus shares worth INR 10 to equity owners. This will have a 9:1 ratio.
By allocating 1,68,46,803 shares at Rs 10 apiece, the logistics unicorn increased the total number of shares from 18,71,868 to 1,87,18,670 bonus shares. According to reports from October 4, 2021, 90 current corporation shareholders would receive these shares.
Sahil Barua claims to hold the most shares among startup founders. The company has given 12.29 lakh bonus shares. The other notable shareholders are Times Internet and CPPIB, receiving the greatest number of shares allotted to corporate investors: 28,53,040,000.
On May 11, 2022, Delhivery is expected to undertake its maiden IPO. If it successfully becomes listed on the BSE and NSE markets, it would join companies like Flipkart-led BlueDart and others. Delhivery plans to double its fleet size over the next 24 months by investing up to Rs 300 crore in infrastructure development for the trucking industry.
According to sources dated August 25, 2021, the company plans an IPO priced at $1 billion.
Delhivery claims to have a turnover of Rs 2800 crore for FY2020 and has plans to reach Rs 6000 – Rs 7000 crore in the next two years.
Edited by Prakriti Arora