Delhivery Shares Drop by Over 3.46% on Large Block Deal

Shares of Delhivery, India's leading logistics services provider, fell 3.70% in early Friday trade, trading at ₹398.50 per share. The downturn followed a substantial block deal transaction involving 1,74,57,113 shares valued at ₹722.18 crore.

The block deal raised speculation as reports surfaced that Japan's SoftBank Group Corp. was behind the sale, intending to offload shares worth $154 million, equivalent to a 4% stake in Delhivery. While the buyers and sellers remained unknown initially, it was anticipated that after the transaction, SoftBank would still hold a 10–11% stake in the logistics giant.

SoftBank, through its subsidiary SvF Doorbell (Cayman), hold around 22% stake in the company in 2018a and 14.5% stake in Delhivery as of September 30. This is not the first time SoftBank has reduced its holdings, as it had previously offloaded 3.8% of its stake worth ₹954 crore in March.

Previous Transactions

Prior to SoftBank, Tiger Global had also sold 1.2 crore shares in Delhivery at ₹335 apiece. This trend aligns with SoftBank's strategy of selling stakes in publicly held companies from its portfolio, including Zomato and Paytm. In the previous month, SoftBank generated ₹1,020 crore from a 1.1% stake sale in Zomato.

The March bulk deal saw participation from various investors, including the Saudi Arabian Monetary Authority, City of New York Group Trust, Societe Generale, BNP Paribas Arbitrage, Morgan Stanley Mauritius, and Baillie Gifford Emerging Markets Equities Fund.

Financial Performance and Analyst Projections

In Q2FY24, revenue from operations reached ₹1,914 crore, marking an 8% growth from ₹1,796 crore in the same period last year. In response to this performance, domestic brokerage firm ICICI Securities maintained a 'buy' rating on the stock, giving a target price of ₹500 per share. CLSA also adjusted its rating on Delhivery from ₹550 to ₹493, estimating a 3.2% reduction in sales for FY24.

Stock performance

Today, Delhivery's stock experienced a 3.46% dip, adding to the recent one-month decrease of 6.12%. Despite short-term challenges, a six-month overview shows a 9% positive return, offering some relief to long-term investors with a 14% gain over the past year. However, a closer look reveals a significant correction, with Delhivery's stock dropping nearly 40% from its 52-week high of Rs 605 in July 2022 to its current trading value of around ₹400.

Analyzing the daily timeframe, Delhivery's shares indicate a phase of profit booking, currently trading at approximately ₹400. If the price sustains below this level, the next potential support is anticipated at around ₹375. Relative Strength Index (RSI) stands at 40 placing the RSI in a neutral position, neither in the overbought nor oversold zone. Investors should closely monitor these technical indicators before placing fresh orders.