Major logistics shake-up: Delhivery acquires Ecom Express for ₹1,400cr
What's the story
Delhivery, India's leading logistics company, has announced its acquisition of Ecom Express in an all-cash deal for up to ₹1,407 crore.
The strategic move, which involves the purchase of a 99.4% stake in Ecom Express, is being touted as one of the largest consolidation efforts in India's diverse logistics industry.
The transaction has been approved by both boards and is expected to be completed within six months, pending regulatory approvals from the Competition Commission of India (CCI).
Business benefits
Delhivery's acquisition of Ecom Express: A strategic move
Delhivery, which has maintained a stronger financial and operational footing compared to its peers, believes this acquisition will result in cost savings and better customer service.
The company also hopes to increase investments in automation, robotics, drones, and electric vehicles (EVs) through this deal.
Sahil Barua, MD and CEO of Delhivery, said, "We believe this acquisition will enable us to service customers of both companies better."
Company history
From e-commerce logistics leader to acquisition target
Founded in 2012, Ecom Express was once a frontrunner in the e-commerce logistics space and drew major investors such as SoftBank, CDC Group (now British International Investment), and Partners Group.
Despite reporting a revenue of ₹2,607 crore for FY24, the company struggled with profitability and scalability amid rising competition and dwindling funding.
This acquisition marks a major shift for Ecom Express as it joins its former rival Delhivery.
IPO halt
IPO plans shelved amid acquisition
Ecom Express had been gearing up for a public listing, but its IPO plans were quietly shelved after its disclosures came under scrutiny.
Delhivery had previously contested the operational and financial metrics presented by Ecom Express in its draft red herring prospectus (DRHP), alleging misrepresentation.
The acquisition comes at a time when the momentum for Ecom's IPO has slowed, and exit options appear limited.
Investor impact
SoftBank's investment in Ecom Express: A loss
SoftBank, which invested nearly $125 million in Ecom Express nearly a decade ago, is likely to take a hit from its stake in the ₹1,407 crore deal. The payout breakdown is yet to be revealed.
This acquisition is more of a rescue move than purely strategic for Delhivery, which will benefit from improved route density and greater control over e-commerce volumes.