STARTUP-STORIES

Ecom Express Submits Rs 2,600-Crore IPO Filing to SEBI

SUMMARY

1. Ecom Express Plans Rs 2,600 Crore IPO The logistics company has filed for an IPO with SEBI to raise Rs 2,600 crore, including a fresh issue of Rs 1,284 crore and an offer for sale of Rs 1,315 crore by existing investors. The funds will be used to expand processing and fulfillment centers, enhance automation, and upgrade cloud infrastructure.

2. Strategic Investments and Financial Performance The company aims to improve operational efficiency and reduce losses, with Rs 387 crore allocated for infrastructure and automation, and Rs 239 crore for cloud and data capabilities. Ecom Express reported revenue of Rs 2,609 crore for fiscal 2024 and a reduced net loss of Rs 255 crore.

Logistics giant Ecom Express has revealed its plans to raise nearly Rs 2,600 crore through an initial public offering (IPO). The company has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for this significant public issue. The offer will include fresh shares valued at Rs 1,284 crore and an offer for sale (OFS) of shares worth Rs 1,315 crore by existing investors.

Offer for Sale and Key Stakeholders

As part of the OFS, prominent stakeholders will divest their shares. Cofounder Kotla Satyanarayana will sell Rs 33 lakh worth of shares, while related promoters Kotla Sridevi and Kotla Rathnanjali will offer Rs 7.6 crore and Rs 1 crore respectively. Other notable sellers include cofounder Manju Dhawan, Jayanti Krishnan, and Rabeya Saxena, among others. Additionally, significant investors such as Warburg Pincus and PG Esmeralda Ltd are set to sell shares worth Rs 211 crore and Rs 931 crore respectively.

Strategic Use of IPO Proceeds

Ecom Express plans to allocate Rs 387 crore from the IPO to expand its network of processing and fulfillment centers, enhancing automation capabilities. The company operates 32 fulfillment centers and 33 advanced sortation systems and aims to improve these facilities further. Additionally, Rs 239 crore will be invested in upgrading cloud infrastructure and data science capabilities, focusing on route optimization, truck utilization, and reducing returns. The firm will also use Rs 87 crore to repay debt and Rs 73 crore for IT infrastructure.

Financial Performance and Growth Prospects

In fiscal 2024, Ecom Express reported operating revenue of Rs 2,609 crore, a slight increase from the previous fiscal year. The company's net loss narrowed to Rs 255 crore from Rs 428 crore. The IPO marks a significant step for Ecom Express as it seeks to enhance its operations and establish itself further in the competitive logistics sector.

If approved, this IPO will position Ecom Express as the second major logistics company focused on online deliveries to list on the Indian stock exchanges, following Delhivery's debut in May 2022. The company's strategic investments and expansion plans are expected to bolster its market position and operational efficiency.