GogoX and Delhivery: A tale of two logistics IPOs

Logistics may lack the glamor of ecommerce, but it’s vital to the latter’s development. There are over a hundred logistics players and enablers in Southeast Asia across a range of subsectors, from warehousing and storage to 4PL providers.

Some of these players will be hoping to go public when markets are more stable. These include large regional players like Ninja Van and Lalamove, and also smaller firms like Vietnam’s Giaohangtietkiem.

Lessons from the past

In the lead-up to their IPOs, Southeast Asian firms should take note of the experiences of two logistics companies that have already gone down that path: India’s Delhivery, which listed on the National Stock Exchange (NSE) of India in May this year, and GogoX, which went public on the Hong Kong Stock Exchange a month later.

Both companies say they have an “asset-light business model.” This means that they serve as a platform to link shippers and drivers. GogoX’s drivers use their own vehicles, while Delhivery leases vehicles from third-party fleet partners.

As part of the model, logistics facilities are leased and not owned, and other components of the logistics chain are offered via collaboration with third parties.

However, the market performances of these two companies have been very different.

Until recently, Delhivery was trading above its IPO price, and outperforming the Nifty50, which represents the weighted average of 50 of the largest Indian companies listed on the NSE.

However, shares slumped 30% over two days after its most recent quarterly results, announced on 19 October, disappointed the market.

That’s nothing to write home about, but it’s still better than GogoX, which has nosedived a whopping 85% since its IPO.

In comparison, the Hang Seng Index, which is the main indicator of overall market performance in Hong Kong, is down 30% in the same period.

Tech in Asia reached out to Delhivery and GogoX. Delhivery had yet to provided comments at the time of publishing, while GogoX referred us to their public filings.

Shares are influenced by the wider market, and the overall superior performance of stocks in India over those in Hong Kong is an important factor.

Where you list matters: Many startup founders have longed shunned markets like Singapore for more dynamic markets in the US or Hong Kong. However, the Singapore market has been an oasis of stability so far, having been described as the “sole winner among developed markets this year”.

But what other factors might explain this difference in performance?

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Geopolitics rears its head