Delhivery Limited , India's largest fully integrated logistics service provider, has announced significant expansion plans, including the incorporation of new subsidiaries internationally and in the financial services sector. The company's Board of Directors has approved these strategic moves to strengthen Delhivery's global logistics capabilities and diversify its service offerings.

International Expansion

Delhivery plans to expand its international presence by incorporating step-down wholly owned subsidiaries in the United Kingdom and United Arab Emirates. Key details of this expansion include:

• The new subsidiaries will be owned by Delhivery Singapore Pte. Ltd., a wholly owned subsidiary of Delhivery Limited.
• Both entities will operate in the logistics business, providing supply chain solutions and logistics services.
• Delhivery plans to invest up to INR 5.00 crore in each subsidiary through one or more tranches via 100% subscription to share capital in cash.
• The incorporation is subject to approval from competent authorities.

Financial Services Subsidiary

In a move to diversify its offerings, Delhivery's Board of Directors has also approved the incorporation of a wholly owned subsidiary named Delhivery Financial Services Private Limited. This new entity will:

• Operate in the financial services sector
• Offer credit, payment, FASTag aggregator, fuel cards, and insurance solutions
• Target partners including truckers, fleet owners, riders, and MSMEs
• Function as a financial layer supporting Delhivery's logistics network
• Leverage the company's data, reach, and partner ecosystem to enhance liquidity access and improve operational efficiency

Delhivery plans to invest up to INR 12 crores and hold 100% shareholding in this new subsidiary. The incorporation is subject to approval from relevant authorities, including the Registrar of Companies.

Strategic Implications

These expansions mark significant steps in Delhivery's growth strategy. By establishing a presence in the UK and UAE, the company is positioning itself to tap into key global markets and enhance its cross-border logistics capabilities. The financial services subsidiary aims to create synergies with Delhivery's existing logistics network, potentially improving operational efficiency and providing additional value to partners.

Financial Commitment and IPO Proceeds Utilization

Delhivery's decision to invest in these new ventures demonstrates its commitment to growth and diversification. The company recently submitted its Monitoring Agency Report for the quarter ended September 30, prepared by Axis Bank Limited, showing no deviation from the stated IPO objectives.

Key points from the report:

• The company's IPO, conducted from May 11-13, 2022, raised Rs. 52,350.00 million.
• The total IPO proceeds of Rs. 38,863.03 million have been fully utilized across three main objectives:
  1. Organic growth initiatives: Rs. 19,000.00 million
  2. Funding inorganic growth: Rs. 10,000.00 million
  3. General corporate purposes: Rs. 8,863.03 million

Market Position

Delhivery has been experiencing growth, as evidenced by its recent financial results. For the reported quarter, the company reported:

While the company faced a loss of INR 50.49 crore for the quarter, it's important to note that this includes integration costs related to recent acquisitions.

Outlook

The establishment of subsidiaries in the UK, UAE, and the financial services sector aligns with Delhivery's long-term strategy of becoming a global, diversified logistics player. As the company continues to expand its international footprint and service offerings, it may leverage its technology-driven approach and extensive experience in the Indian market to compete in these new territories and sectors.

These moves come at a time when global supply chains are evolving, and there's an increasing demand for efficient, technology-enabled logistics and financial solutions. Delhivery's expansion into these strategic areas could potentially open up new revenue streams and partnership opportunities in both the international logistics sector and the financial services industry.

As Delhivery awaits regulatory approvals for these new subsidiaries, the industry will be watching closely to see how these expansions unfold and impact the company's global market position and service portfolio.

Delhivery , India's largest fully integrated logistics service provider, has launched a groundbreaking initiative aimed at enhancing transparency within India's logistics sector. The company introduced the Freight Index One, a new platform designed to provide comprehensive freight pricing information for various stakeholders in the logistics industry.

Key Features of the Freight Index One

The Freight Index One platform offers several important features:

• Historical, current, and forward Full Truckload (FTL) pricing estimates
• Coverage for major trucking lanes in India
• Pricing for both open and closed container vehicle types
• Data modeled from nearly a decade of market intelligence and Delhivery's internal data

Addressing Market Gaps

Rohan Anand, Head of Data Science at Delhivery, highlighted the significance of this initiative, stating, "India currently does not have equivalents to global indices like the Cass Freight Index and Freightos Baltic Index (FBX)." This gap has led to several challenges in the logistics sector, including:

• Routing issues
• Uncertainty about costs, especially during periods of seasonal demand
• Significant information asymmetries

The Freight Index One platform aims to tackle these challenges by providing reasonable estimates of freight pricing, which is crucial for reducing overall logistics costs and increasing revenues for both transporters and shippers.

Comprehensive Data Modeling

The platform incorporates a wide range of factors in its pricing estimates, including:

• Supply fluctuations
• Seasonality
• Route viability
• Economic indicators such as fuel prices, toll rates, and taxes

This comprehensive approach ensures that the pricing estimates are as accurate and relevant as possible.

Collaborative Approach

Delhivery is taking a collaborative approach with this initiative. Kapil Bharati, Chief Technology Officer at Delhivery, explained, "Through Freight Index One, we plan to enable efficient price benchmarking and help customers plan budgets using market-wide data."

This open approach is expected to:

• Allow for more informed rate negotiations
• Enable better budget planning for customers
• Facilitate price benchmarking across the industry

Participation and Access

Industry participants, including transporters, fleet owners, shippers, and logistics players, can access the Freight Index One by visiting https://one.freightindex.in/ .

About Delhivery

Delhivery continues to solidify its position as a leader in India's logistics sector. Some key statistics about the company include:

The company offers a wide range of logistics services, including express parcel transportation, PTL freight, TL freight, cross-border, supply chain, and technology services.

As Delhivery continues to innovate and expand its offerings, the launch of the Freight Index One represents a significant step towards bringing greater transparency and efficiency to India's logistics market. This initiative has the potential to reshape how pricing and planning are conducted in the industry, benefiting a wide range of stakeholders from individual transporters to large-scale shippers.