Softbank sells 3.8% stake in Delhivery for ₹954 cr; stock down 3%

Japanese fund Softbank has sold 2.8 crore shares, or 3.8% stake, in logistics unicorn Delhivery for ₹954.24 crore. The shares were sold through a bulk deal at ₹340.80 apiece on Wednesday, according to data on the BSE. The development comes after another major global investor Tiger Global sold 1.2 crore shares in the Gurugram-based company at ₹335 apiece in February.

On Thursday, the shares of Delhivery dropped 3% to ₹338 in intraday trade today. The shareholding pattern shows Softbank owned 18.42% stake in Delhivery through its subsidiary Svf Doorbell (Cayman) Ltd, which after the selling of the stake has come down to 14%.

Delhivery shares opened a tad higher today at ₹349.95 and rose to its intra-day high of ₹350 on the BSE. However, the stock soon pared gains and dropped from the day’s high to ₹337.90 levels.

Besides, the company on February 28 approved the grant of 23,095 stock options under the Delhivery Employees Stock Option Plan 2012 to the eligible employees w.e.f. March 1, 2023. In the latest report on India's logistics market, Delhivery said India’s logistics market is large and highly fragmented, with direct logistics spending at 8% and the share of top organised players at 1.5%.

Delhivery, which made its stock market debut on May 24, 2022, has delivered a negative return of 37% since its listing on the domestic bourses. The stock has witnessed decent erosion from its all-time high levels of ₹708.45 touched on July 21, 2022. It slipped to a record low of ₹291 on January 27, 2023. In the last six months, the stock has fallen 40%, while it has rebounded 12% in a month. The counter has risen 1% in a week as compared to a 1.6% fall in the BSE benchmark Sensex.

For the October-December quarter of the current fiscal (Q3 Fy23), the Gurugram-based logistics services provider reported a net loss of ₹196 crore compared with a loss of ₹126 crore in the corresponding period last fiscal. The logistics firm’s revenue from operations dropped 9% to ₹1,823 crore as against ₹1,995 crore in the year-ago period.

Segment-wise, revenue from the partial truckload freight segment declined to ₹277 crore in the quarter that ended December 2022 compared with ₹293 crore in Q2 FY23. Revenue from Delhivery’s Express Parcel services stood at ₹1,200 crore in Q3 FY23.

According to foreign brokerage Jefferies, Delhivery’s Q3 EBITDA loss was lower than expectations as gross profit was better and other expenses lower. “Management exhibited confidence in reducing losses further. We believe current price factors less than 10% express parcel growth in the next 3-5 years vs 30%+ levels seen in the past,” the brokerage said, maintaining its ‘Buy’ call on the stock with a target price of ₹570 per share.

Analysts at Morgan Stanley cut the target price of the Delhivery stock to ₹370 per share, while giving an ‘overweight’ call. Higher operating leverage and cost rationalisation measures resulted in above-estimated Adjusted EBITDA, the brokerage says.