Dilliver’s IPO worth Rs 5,235 crore is running out of institutional demand

The initial public offering (IPO) of logistics firm Dilliveri was fully subscribed on Friday, the final day of bidding, for the needs of institutional investors. According to data available on the exchange, the issue has been subscribed 1.6 times, collecting bids for 101.6 million shares, as against 62 million on offer. By the second day of the offer, the public offer has received only 23% subscription.

Despite the challenging market situation, last-minute bids from mutual funds and foreign institutional investors helped overcome the problem on Friday. Separate portions (including MFs, FIIs) for eligible institutional buyers were subscribed 2.6 times on the final day. However, even on the final day of bidding, the quota for retailers, employees and HNIs was low-subscribe. The retail quota received 57% subscriptions, while the employee and HNI quotas received 27% and 30% subscriptions, respectively.

Experts say the problem has hit markets when they have stagnated and central banks are tightening policies to tackle inflation, eroding liquidity. To date, both the Sensex and the Nifty have corrected about 9-10% within this headwind. Additionally, after the stock prices of Paytm and Zomato fell, retail demand from new-age technology companies hit.

Dillivari had planned to raise Rs 5,235 crore through the first public offer and the price of the issue was fixed at Rs 462-487 per share in the band. In the listing, top-end, the logistics player will control a market capitalization of Rs 35,284 crore.

Earlier this week, the company raised Rs 2,346.74 crore from anchor investors, allocating a total of 4,81,87,860 equity shares at Rs 487 crore. AIA Singapore, Tiger Global Investment Fund, and Society General Anchor were among the top foreign investors participating in the book. Among the domestic mutual funds, SBI MF, HDFC MF, ICICI Prudential MF, Mirae MF and Nippon India MF participated in the anchor round.

Gurugram-based Delhiveri is India’s largest and fastest growing fully-integrated logistics service player in terms of revenue as per FY21. The company has built a nationwide network, serving 17,045 pin codes in the six months ending June 30, 2021, or 88.3% of 19,300 pin codes in India. For the nine months ended December 2021, the company had a revenue of Rs 4,911 crore, with a net loss of Rs 891.14 crore during the period.