No slowdown in logistics, acquisitions on cards: Delhivery CBO Sandeep Barasia

Delhivery is gearing up aggressively for acquisitions, encouraged by improving small business and ecommerce activity in Tier II and III markets, and an economy that it sees as clearly being in a growth phase.
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Logistics startup Delhivery is bulking up its purse as it prepares to go for more shopping to take advantage of what it views as improving market conditions, particularly in India’s small cities and towns.

The company debuted on the stock exchanges in May this year amid a slump in the performances of other publicly listed new-economy companies. It, too, traced that pattern. But on Thursday, Delhivery's shares scaled to a fresh intraday high of Rs 708.45 apiece on BSE.

Delhivery is now among the 100 most-valuable stocks on the bourse, with its market capitalisation crossing Rs 50,000 crore.

Chief Business Officer Sandeep Barasia was optimistic even earlier, as he outlined Delhivery’s acquisition plans and why he was confident about the market, in an interview with YourStory Founder and CEO Shradha Sharma.

“There are very few parts of the world that are as dynamic and as vibrant as India is today,” he said in the interview. “Maybe we will not grow at 8.5 percent this year. Maybe we will grow at 5 percent. But our growth will still be larger than the combined GDPs of many countries.”

Acquisitions, he said, will be a key part of the company’s strategy, adding that during the IPO, Delhivery had set aside Rs 1,000 crore—or 25 percent of what it raised as primary proceeds—for M&As.

“Also, at that point, (Delhivery) still had Rs 2,500 crore-plus left from before. So, we have a large corpus of cash available to do M&A activities. Our stock can also be used for M&A,” Sandeep said.

In December 2021, Delhivery purchased California-based Transition Robotics, and earlier in August, acquired Spoton Logistics for its freight services business.

Sandeep said Delhivery will be scouting for companies in the business-to-business (B2B) space, particularly in part-truck load freight and supply chain services.

“We will not do private equity- or venture capital-style investing. We will not take minority stakes in businesses that have nothing to do with us. Our preference is always to take a majority stake. It has to be something core to our business,” he added.

Sandeep’s bullishness stems from government reforms and improving infrastructure that he says will boost India’s prospects over the next 5-7 years. He says he already sees the impact on small businesses and ecommerce outside the urban markets.

“If you look at the number of interesting businesses getting created in small towns, if you go to Surat, to Puducherry, and if you look at the number of interesting businesses that are on the SME exchange in India, it’s fascinating,” he remarked. “These are the ones making a difference in India.”

As for ecommerce, Sandeep says people no longer shop online for discounts, but for the convenience and the options, particularly in small towns where in-store access to several products found in larger cities could be limited.

The logistics sector, he says, isn’t facing a slowdown but could experience shifts within the industry–from unorganised to organised, and from organised to tech-oriented players such as Delhivery.

“We haven’t yet faced any sort of major slowdown," Sandeep said in the interview. "If this is happening in the commodity side of the market, I will not know because we don’t participate in that part of the market. If this is happening in the heavy industries sector, we don’t know. But in manufactured goods, I have not seen any major impact as of now.”

Edited by Kanishk Singh