IPO-bound Meesho's increasing reliance on in-house low logistics arm could hurt Delhivery: Jefferies

The shares of Delhivery dropped in trade on December 2 after Jefferies said the increasing reliance of soon-to-be-listed Meesho on its in-house low logistics arm Valmo acts as a key downside risk for the logistics platform. Delhivery shares fell more than 1 percent to trade at Rs 412.90 apiece in the morning of Tuesday. Here's what Jefferies said: Jefferies in its latest note maintained an 'Underperform' rating on the stock, with a target price of Rs 390 per share. This implies a downside potential of nearly 7 percent from the stock’s previous closing price of Rs 417.6 apiece. According to Meesho's draft IPO papers filed with SEBI, the company shipped nearly 29.6 crore orders through Valmo during the April-June quarter of the ongoing financial year, as against 18 crore orders shipped through end-to-end express parcel delivery companies like Delhivery. This is sharply different from the trend seen in earlier years, where majority of the orders were shipped through the third-party delivery companies. Jefferies noted that Valmo now handles approximately 50 percent of Meesho's shipments at a lower cost, as against third party logistics providers such as Delhivery. The international brokerage estimated that Meesho accounted for roughly 16 percent of Delhivery's FY25 revenue. Hence, Meesho’s shift to insourcing could weigh on Delhivery's mainstay express parcels growth, it added. Meesho IPO: SoftBank-backed e-commerce platform Meesho will launch its much-awaited initial public offering (IPO) tomorrow, December 3. The company has fixed its price band at Rs 105-111 per share, valuing the business at nearly Rs 50,096 crore at the upper end. The Rs 5,421.05-crore IPO comprises a fresh issue of shares worth Rs 4,250 crore and an offer for sale (OFS) of shares worth up to 10.55 crore shares by existing shareholders. Delhivery share price history: Delhivery shares have fallen nearly 12 percent in the past one month, but gained over 13 percent in the past six months. The stock is up more than 19 percent in 2025 so far. The stock currently has a P/E ratio of around 158. Follow all LIVE updates from the stock markets here. (With inputs from Reuters) Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.