A decade ago, Sahil Barua, Mohit Tandon and Suraj Saharan left their lucrative jobs at Bain & Co to pursue their dream of setting up a third party logistics company. They managed to persuade Bhavesh Mangalani, who worked in Reliance Industries, and Kapil Bharti, the founder of the two companies, to join them.
On 5 April 2011, he saw his dream take shape with the launch of SSN Logistics, the parent of delhivery, with an authorized share capital of ₹1 Lac.
It was not an easy journey. The founders had to put money out of their own pocket to keep the firm running in the first year, after which Traxcn angel investor Abhishek Goel “made these investments”. ₹50-60 lakh, which kept us running for 12 months or so”, recalled Barua, CEO & MD delhiveryMILF in an interview vCircle in 2015.
After several funding rounds from major investors such as Carlyle, SoftBank and FedEx, the founders are now sitting unexpectedly, with Delhivery ready to issue its initial public offering. ₹7,460 crore at a valuation of $5.5 billion.
Barua alone has a share ₹1,296 crore, according to the draft Red Herring Prospectus (DRHP) filed with the Securities and Exchange Board of India last week. Together, the four founders (Barua, Saharan, Tandon and Bharti) have a total share of ₹3,176.7 crores. Mangalani had resigned in December 2020.
To be sure, not all founders intend to sell their stake in the upcoming IPO, which includes a new issue. ₹5,000 crore and up to an offer for sale (OFS) ₹2,460 crore by the existing promoters and shareholders.
Barua will not participate in the OFS round. On the other hand, Tandon, who holds 1.88% stake in the firm, has offered to sell shares worth Rs. ₹40 crores; and Saharan, who holds 1.24% stake, has proposed to sell a stake in Price. ₹6 crores.
Bharti owns 1.11% of the company’s chief technology officer and has offered to sell shares worth Rs. ₹14 crores during public float.
Like many startups, the journey for Delhi was not easy. In the interview cited above, Barua recalled that one of the biggest challenges was convincing investors that a third-party player could be created and there was room for an e-commerce enabled business. Eight months into the business, apart from the five founders, Delhivery had just one person in the call center, a techie and all 30 “field folk”, Baruah said, underscoring the difficulty in attracting people.
According to DRHP, as of June, Delhi had 12,665 permanent employees and 27,313 contract workers. It also hires temporary workers for last-mile delivery services; It had 26,370 last-mile delivery agents in June. In addition, it has 21 automated sorting centres, 71 fulfillment centres, 2,235 self-managed centers and over 1,100 planetarium partner centres, which are counted among the largest logistics players in India.
According to Barua, automation played a key role in differentiating Delhi from the traditional courier service.
“Technology is the core of what we do… From order management systems to warehousing, to inventory tracking, it is all done by our in-house technology,” he had said.
The distribution’s growth was also driven by huge funding from venture capital and private equity investors. The Gurugram-based company became a unicorn in 2019 after raising $395 million in a Series F round led by SoftBank at a valuation of around $1.5 billion.
Delhivery has also been very active on inorganic development; Its biggest acquisition this year came when it bought Spotton Logistics Pvt Ltd. Ltd.
nikhil.patwardhan@livemint.com
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