Gurugram-based B2C e-commerce logistics solutions provider Ecom Express, which is backed by the Warburg Pincus, Partners Group, and British International Investment, has planned to raise Rs 2,600 crore via IPO. It has filed a draft red herring prospectus with the capital markets regulator SEBI on August 15.
The IPO is a combination of fresh issuance of shares worth Rs 1,284.5 crore and an offer-for-sale (OFS) of up to Rs 1,315.5 crore by promoters and investors.
Individual promoters Kotla Satyanarayana, Manju Dhawan, Kotla Sridevi, Kotla Rathnanjali, and corporate promoters Eaglebay Investment, and PG Esmeralda Pte will be selling Rs 1,160.84 crore worth of shares via OFS.
Investor British International Investment plc planned to sell Rs 136.97 crore worth of shares in the OFS, while Jayanti Krishnan, Rabeya Saxena, and Saheba Saxena will be the other selling shareholders.
Eaglebay Investment is owned by the global private equity firm Warburg Pincus, while PG Esmeralda Pte, incorporated in Singapore, is a part of the Partners Group, the global private markets investment manager.
Ecom Express may consider raising up to Rs 256.9 crore funds via pre-IPO placement, before the filing of the Red Herring Prospectus with the Registrar of Companies (ROC). If it completes the pre-IPO placement, the said amount will be reduced from the fresh issue size.
Promoters hold 82.99 percent shareholding in the company, and the remaining 17.01 percent is held by the public shareholders including 10.03 percent by British International Investment plc (erstwhile CDC Group plc).
The company that connects digital retailers and e-commerce platforms to their end consumers across the country will spend Rs 387.44 crore, out of the net fresh issue proceeds, for setting up new processing centres with automation and new fulfilment centres. Furthermore, it will invest Rs 73.7 crore for computers and information technology equipment, and Rs 239.2 crore for enhancement of technological and data science capabilities including cloud infrastructure.
Rs 87.92 crore will be utilised for repaying debt, and the remainder funds for general corporate purposes and unidentified inorganic acquisitions. It had outstanding borrowings of Rs 165.65 crore as of June 2024.
Ecom Express which competes with Blue Dart Express and Delhivery has recorded a net loss of Rs 248.5 crore for the fiscal year ended March 2024, narrowing from the loss of Rs 359.85 crore, while revenue from operations grew by just 2.2 percent to Rs 2,609.2 crore during the same period.
It has seen some improvement on the operating front as the EBITDA (earnings before interest, tax, depreciation and amortisation) loss stood at Rs 4.8 crore for fiscal 2024, narrowing significantly from the EBITDA loss of Rs 49.7 crore.
However, the loss in fiscal 2022 was at Rs 46.3 crore on revenue of Rs 2,091.9 crore, but the operating performance was strong with EBITDA profit at Rs 83.3 crore.
With end-to-end offerings, differentiated network reach, technology-driven capabilities and a focus on service quality, it has built long-standing relationships with its customers across different e-commerce categories. Its customers include Meesho, Amazon, Nykaa, Puma, Purplle, E-Kart and V Mart among others. As of March 2024, it had 6,384 active customers.
The B2C e-commerce market in India is expected to grow at a CAGR of 21 percent over the next five years from Rs 5.1 lakh crore in gross merchandise value (GMV) for fiscal 2024 to Rs 12.5 – Rs 13.5 lakh crore by the FY29. Further, growth in B2C e-commerce shipments is increasingly coming from Tier 2+ regions whose contribution to B2C e-commerce shipments grew to 62 percent in FY24 and is further expected to grow at a CAGR of 35 percent until the FY29 and contribute to 70-80 percent of B2C e-commerce shipments.
In fiscal 2024, it had the second-largest market share among its peers in terms of B2C e-commerce shipments and handled over 27 percent of all B2C e-commerce shipments through third-party logistics providers in India.
Axis Capital, IIFL Securities, Kotak Mahindra Capital Company, and UBS Securities India are the merchant bankers on the issue.
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