Ecom Express plans Rs 2,600 crore IPO
Ecom reported a loss of Rs 256cr for FY24, down from Rs 428cr in FY2023; revenue was up marginally to Rs 2,609cr
Logistics startup Ecom Express is planning to raise Rs 2,600 crore via an initial public offering (IPO) including Rs 1,284 crore of fresh issue and an offer for sale component of Rs 1,316 crore.
The company has filed its 446-page draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for the public issue.
Ecom Express reported a loss of Rs 256 crore for financial year 2023-24, down from Rs 428 crore reported in the previous financial year. Revenue increased marginally to Rs 2,609 crore from Rs 2,554 crore in FY2023. Shipments handled increased 10 percent to 514 million compared to 468 million in FY2023.
“Our losses and negative cash flows may continue in future periods, given the investments expected to be made to grow our business and logistics infrastructure, enhance our supply chain capabilities, develop and launch new solutions and service offerings, expand our customer base in existing markets, penetrate new markets and continue to innovate on our technological platform. We have expended and expect to continue expending substantial financial and other resources on technological investments (such as data science), infrastructure and our team, among other initiatives,” says the IPO document.
The logistics provider plans to use Rs 387 crore for capital expenditure towards setting up new processing centres with automation and new fulfilment centres. Ecom will also use Rs 239 crore for technological enhancements and data capabilities including cloud infrastructure, and repay debt of around Rs 88 crore from the IPO proceeds.
History and now
Ecom Express, incorporated in 2012, provides services across 29 states and six union territories, serving 27,000+ pin codes across the country. Kotla Satyanarayana, Manju Dhawan, Kotla Sridevi, Kotla Rathnanjali, Eaglebay Investment and PG Esmeralda are the promoters who are also selling shares in the public offer. Institutional investor British International Investment (erstwhile CDC Group) is also selling its shares in the public offer.
Revenue from the top 10 customer groups came in at Rs 2,198 crore, or 84 percent of the total revenue in FY2024. "We cannot assure you that we will be able to maintain historic levels of business with these key customer groups. Our top ten customer groups include Meesho, Amazon, Shiprocket, Roposo and Nykaa, among others."
As of March 31, 2024, Ecom's network included 115 pick-up and processing centres, 81 sorting hubs, 32 fulfilment centres, 3,421 delivery centres and 89 return centres.
A key challenge for Ecom Express is increased competition from third-party logistics or transport providers that could force it to lower service charges, "thereby reducing our profit margins or market share. Our competitors include Delhivery, Bluedart, Xpressbee and Shadowfax."
Ecom Express employed 15,616 full-time employees at the end of March 31, 2024. Additionally, during the month of March 2024, the company utilised the services of 22,555 off roll employees on a contractual basis and 32,029 gig workers.