Logistics company Ecom Express files DRHP with SEBI to raise Rs 2,600 crore via IPO

Gurugram-based B2C e-commerce logistics provider Ecom Express has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on August 15, 2024. 

The company aims to raise up to Rs 2,600 crore through this Initial Public Offering (IPO).

It is backed by prominent investors Warburg Pincus, Partners Group, and British International Investment,

IPO structure

The proposed IPO consists of a fresh issue of equity shares amounting to Rs 1,284.5 crore and an offer-for-sale (OFS) by existing promoters and investors totalling Rs 1,315.5 crore.

Key promoters and shareholders involved in the OFS include Kotla Satyanarayana, Manju Dhawan, Kotla Sridevi, Kotla Rathnanjali, Eaglebay Investment Ltd, and PG Esmeralda Pte Ltd.

Notably, Eaglebay Investment, which is owned by Warburg Pincus, will sell a significant portion of its stake, while PG Esmeralda Pte, linked to Partners Group, is also a major seller.

British International Investment plc, formerly known as CDC Group plc, plans to sell shares worth Rs 136.97 crore.

The company may consider raising up to Rs 257 crore through a pre-IPO placement, which, if completed, would reduce the fresh issue size accordingly.

Focusing on expansion and technology enhancement

Ecom Express has outlined a detailed plan for utilizing the funds raised through the IPO. A significant portion, Rs 387.44 crore, will be directed toward establishing new processing centers with automation and new fulfillment centers across India.

Additionally, Rs 239.23 crore will be allocated to enhancing the company's technology, data science capabilities, and cloud infrastructure.

The firm also plans to invest Rs 73.71 crore in computers and IT equipment and will use Rs 87.92 crore to repay existing debt.

Any remaining funds will be used for general corporate purposes and potential acquisitions.

Ecom Express' financial performance

Despite facing challenges, Ecom Express has shown improvement in its financial performance. For the fiscal year ending March 2024, the company reported a net loss of Rs 248.5 crore, a reduction from the previous year's loss of Rs 359.85 crore.

Revenue from operations grew marginally by 2.2% to Rs 2,609.2 crore during the same period.

The company's EBITDA (earnings before interest, tax, depreciation, and amortization) loss also narrowed significantly to Rs 4.8 crore, down from Rs 49.7 crore in the previous fiscal year.

As of March 2024, It had the second-largest market share in B2C e-commerce shipments and managed over 27% of such shipments through third-party logistics providers in India.