Gurugram-based B2C e-commerce logistics provider Ecom Express 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 leading investors such as Warburg Pincus, Partners Group and British International Investment.
IPO Structure
The proposed IPO consists of a fresh issue of equity shares worth Rs 1,284.5 crore and an offer for sale (OFS) by promoters and existing investors totalling Rs 1,315.5 crore.
The 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, Warburg Pincus-owned Eaglebay Investment will sell a significant portion of its stake, while Partners Group-linked PG Esmeralda Pte 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 accordingly reduce the size of the fresh issue.
Focusing on expansion and technological improvement
Ecom Express has outlined a detailed plan to utilise the funds raised through the IPO. A major portion, Rs 387.44 crore, will be spent on setting up new processing centres with automation and new fulfilment centres across India.
Additionally, Rs 239.23 crore will be allocated to enhance the company’s technology, data science capabilities and cloud infrastructure.
The company also plans to invest Rs 73.71 crore in computers and IT equipment and will use Rs 87.92 crore to repay existing debt.
The remaining funds will be used for general corporate purposes and potential acquisitions.
Ecom Express Financial Performance
Despite the challenges it faces, Ecom Express has shown an improvement in its financial performance. For the fiscal year ended March 2024, the company reported a net loss of Rs 248.5 crore, down 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 amortisation) loss also narrowed significantly to Rs 4.8 crore, down from Rs 49.7 crore in the previous fiscal.
As of March 2024, it held the second-largest market share in B2C e-commerce shipments and managed over 27% of such shipments through third-party logistics providers in India.
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