Also in this letter:
- Govt releases FAQs on IT rules, stands firm on traceability
- PolicyBazaar parent’s IPO 53% subscribed on day one
- Milestone: UPI transactions cross $100 billion in October
Carlyle, SoftBank to sell part stakes in Delhivery’s $1-billion IPO
Delhivery CEO Sahil Barua
Investors in Delhivery — such as Carlyle, Focus, SoftBank Vision Fund and Times Internet — will sell shares worth Rs 2,000-2,500 crore in the offer for sale (OFS) component of the company’s IPO, sources with direct knowledge of the development told us. Times Internet is part of the Times Group, which also owns ETtech.
Carlyle holds 10.3% of Delhivery while SoftBank has a 22.2% stake as of September 29, according to data from Tracxn.
Details: Carlyle, which first backed Delhivery in 2017, will liquidate shares worth $100 million or Rs 750 crore.
- Chinese investor Fosun will sell its entire stake, two sources told us.
- SoftBank Vision Fund will sell shares worth $100 million and Times Internet will offload shares worth $50 million.
IPO timeline: Delhivery is expected to file its IPO papers in the next few days and aims to list by early next year. It is looking to raise about Rs 5,000 crore in primary capital, seeking a valuation of $6-6.5 billion for the IPO.
In filings with the Ministry of Corporate Affairs, Delhivery said it had issued around 39,99,400 stock options to 207 employees, data sourced from Tofler showed. It also appointed Kalpana Morparia, Romesh Sobti, and Saugata Gupta as independent directors on its board, as part of its IPO preparations.
Pre-IPO funding: Lee Fixel, a former partner at Tiger Global, had invested $125 million in Delhivery through his fund Addition in September, partly through a secondary purchase of shares from China’s Fosun. The Chinese fund sold 1.32% of its 3.8% stake, valuing Delhivery at $4 billion.
Financials: Sandeep Barasia, managing director and chief business officer, told us in June that the startup had clocked revenue of more than Rs 3,700 crore in FY21. It had reported a revenue of more than Rs 2,988 crore and a loss of around Rs 269 crore in FY20.
In an interview with ET in June, CEO Sahil Barua had for the first time defined a timeline for going public. He said the company had formed a board sub-committee for its IPO and M&As in January.
Also Read: ETtech IPO Watch: A decade of Delhivery
Govt releases FAQs on IT rules, stands firm on traceability
Junior IT Minister Rajeev Chandrasekhar
The government has reiterated its stand that requiring end-to-end encrypted platforms such as WhatsApp, Telegram and Signal to track the “first originator” of messages would not weaken or break their encryption protocols.
Driving the news: The ‘clarification’ was part of an FAQ that the Ministry of Electronics and Information Technology released earlier today, which sought to clarify various parts of the Information Technology Rules, 2021, which came into effect on May 26. The government said it created the FAQs in consultation with industry players and other stakeholders.
What’s the issue? The new IT Rules require, among other things, that “significant social media intermediaries” — that is, social media and chat platforms with more than five million users in India — to be able to trace the “first originator” of any post or message, and hand over the person’s details to the government on request.
Chat platforms such as WhatsApp have said that this cannot be done without checking every single message sent on their platforms, which would require them to break their encryption protocols and compromise the privacy of all their users.
The government disagrees, and said so (again) today.
Quote: “The Internet, for all of the good things that it represents…also represents significant growth in things that we refer to as user harm. So policymaking has to grow the good and address the bad in a manner that is very transparent, very effective,” Rajeev Chandrasekhar, Minister of State for Electronics and IT, said at an event announcing the release of the FAQs.
Yes, but: MeitY said that the document was not the standard operating procedure (SOP) that the industry has been awaiting for. Stakeholders want the central government to guide companies on how to deal with content takedown requests from the union government and state governments.
Tweet of the day
Policybazaar parent’s IPO 53% subscribed on day one
The Rs 5,710-crore IPO of PB Fintech, parent firm of Policybazaar, was subscribed 53% on the first day of bidding today, receiving bids for 1.83 crore of the 3.45 crore shares on offer.
The retail investor’s portion was fully subscribed on day one, while the portion set aside for non-institutional investors was subscribed 6%. The qualified institutional buyer’s segment subscribed 56%.
Policybazaar’s IPO comprises a fresh issue of shares worth Rs 3,750 crore and an offer for sale of Rs 1,960 crore by existing shareholders. It has set a price band of Rs 940-Rs 980 a share and is looking to list at a valuation of $6.15 billion. The IPO will close on Wednesday.
Opinion divided: Analysts are divided on the asking valuations, some are recommending that investors skip the IPO.
The SoftBank-backed startup raised more than Rs 2,569 crore from 155 anchor investors on Friday. These included leading insurance firms such as HDFC Life, ICICI Prudential, Bajaj Allianz Life, SBI General Insurance and Max Life Insurance.
Also Read: Policybazaar founders to cut sale of own shares in IPO by 85-90%
Value of UPI transactions crosses $100 billion in October
The value of transactions made using the Unified Payments Interface (UPI) crossed $100 billion in a month for the first time in October, data from the National Payments Corporation of India (NPCI) showed. This further cements UPI’s position as India’s most popular digital payments system by far.
Why the jump? The spurt in October was largely due to increased demand for online shopping amid the festive season, and the gradual reopening of the economy since the ebbing of the second wave.
The numbers: A whopping 4.2 billion UPI transactions amounting to Rs 7.71 lakh crore (about $103 billion) were conducted in the month, marking all-time highs on both counts for the five-year-old payments channel.
In September, UPI had registered 3.6 billion transactions worth Rs 6.5 lakh crore crore. This means the number of transactions jumped 15% and the value of transactions rose 18.5% in October.
The number and value of UPI transactions have more than doubled since this time last year.
Up, up and away: UPI has passed several significant milestones since its launch in 2016. It crossed a billion transactions for the first time in October 2019, and the next billion came in under a year.
- Since the start of 2021, monthly transaction value has grown by close to 79% from Rs 4.31 lakh crore in January.
- The number of transactions, meanwhile, have increased by more than 83% from 230 crore in January.
Other modes of digital payments also surged in October. The Immediate Payments Service (IMPS) touched an all-time high both in terms of number and value of transactions. It clocked 430.67 million transactions worth Rs 3.70 trillion in the month.
NPCI’s National Electronic Toll Collection (NETC) channel, which runs FASTag, recorded an all-time high of 214.23 million transactions worth Rs 3,356.74 crore in October, indicating the return of road traffic with most states easing Covid-19 travel protocols.
SoftBank sells more DoorDash shares as appetite for exits grows
SoftBank Group CEO Masayoshi Son has sold DoorDash shares worth $2 billion, Bloomberg reported. It’s the third time he has diluted SoftBank’s stake in the US food delivery giant in the past six months.
The details: On October 27, SoftBank Vision Fund unloaded 10 million shares at $202.815 each, according to a filing with the US Securities and Exchange Commission. Son sold $1 billion worth of DoorDash stock in May and raised $2.2 billion from a sale in August.
After the latest sale, SoftBank owns 33.6 million DoorDash shares — or about 11% of the company. This is just over half the stake it held when DoorDash went public in December. Its shares dove 8.9% in New York last week to close at $194.80.
New appetite for exits: Son is known for his reluctance to cash in on investments but has shown a new appetite for exits to finance the accelerating pace of dealmaking at his Vision Fund. SoftBank sold listed stocks worth roughly $14 billion in the June quarter, nearly triple the amount in the previous period. Over the past six months, the selloff included significant portions of its stakes in some of Son’s biggest IPO hits like DoorDash, South Korean e-commerce giant Coupang Inc. and Chinese online property platform KE Holdings Inc.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.