In a big step toward going public, Ecom Express, the major Indian logistics company, has filed a draft red herring prospectus with the Securities and Exchange Board of India. With this, it secures the second attempt by the company at an IPO after its previous plan got postponed in February 2022. According to Entrackr, the DRHP was filed just days after the board of the firm approved the IPO.
PC: VCCircle
It expects to raise Rs 2,600 crore through the IPO, with Rs 1,284.5 crore from a fresh issue of equity shares and Rs 1,315.5 crore from an OFS in shares. The company’s largest shareholder is Partners Group, with a 49.76 percent stake in Ecom Express. The firm will offload shares worth Rs 931 crore. The other stakeholders, which include Warburg Pincus and British International Investment, are also participating in the OFS, selling their shares for Rs 211 crore and Rs 137 crore, respectively.
These issues are handled by book-running lead managers like IIFL Securities Limited, Axis Capital, Kotak Investment, and UBS Securities India, who play very crucial roles in the management of the IPO process. In this environment, a public offering is just a quintessential opportunity to raise further capital for Ecom Express for its future growth and expansion plans.
Ecom Express, a 13-year-old company, has been one of the major players in the Indian logistics space, covering more than 2,700 towns and 27,000 pin codes. The company delivered 514 million shipments in the year ending FY 2024, nearly 81.79% of which came from Tier 2 cities. That testifies to the presence of the firm across non-metro towns that are fast becoming a crucial market for logistics services.
Though Ecom Express has proved resilient, it had its share of problems in the past and managed to cut costs and show an improvement in financial performance. As per FY24, the company has shown a growth of 2.1 percent in the revenue to Rs 2,609 crore against Rs 2,554 crore in FY23, while its losses also came down by 40 percent to Rs 256 crore during said period, reflecting a recovery in operational efficiency.
Parallel to the IPO plans, Ecom Express is raising Rs 1,424 crore (~USD 172 million) from its existing investors by issuing rights. The company has already raised over USD 250 million in equity and debt financing since inception, thus demonstrating the ability to attract investments for growth on sustainable grounds.
As Ecom Express readies itself to enter public markets, its performance will be keenly watched by the entire logistics fraternity. The strategic direction in expanding reach and optimizing operations sets the company well to harness the huge opportunity of logistics service growth in India. Successful execution of this IPO will not only provide the necessary funds for future initiatives but also enhance market presence and competitiveness in the rapidly changing logistics landscape.
