Third-party logistics company Delhivery is going to acquire Ecom Express for ₹1,407 crore, signalling major consolidation in the Indian logistics space.
The Gurgaon-based Delhivery said the acquisition is going to drive scale, which is crucial for the logistics business both from the cost and operations point of view.
The transaction, which involves the acquisition of an at least 99.4 per cent of the issued and paid-up share capital, on a fully diluted basis, of Ecom is expected to close within 6 months, subject to the approval from the Competition Commission of India, and customary closing conditions.
Commenting on the transaction, Sahil Barua, MD and CEO of Delhivery, said: “We believe this acquisition will enable us to serve customers of both companies better, through continued bold investments in infrastructure, technology, network and people. The founders and management of Ecom Express have established a high-quality network and team, creating a strong foundation to integrate into Delhivery’s operations.”
K. Satyanarayana, founder of Ecom Express, added that Delhivery would be the ideal shareholder for Ecom Express’s ‘next phase of growth’.
“With this acquisition and its inherent synergies, businesses across India as well as the logistics industry itself will benefit immensely through the combination of two like-minded players,” he informed.
Ecom, which posted a turnover of ₹2607.3 crore in FY24, had planned for an IPO and received Sebi approval. Instead of floating shares in the choppy market, the owners, however, decided to cash out entirely.
For Delhivery, which finally became profitable at the PAT level, acquisition of Ecom will strengthen its value proposition to clients with enhanced scale. The increased scale in turn is expected to allow Delhivery to invest more effectively in improving service quality through network expansion, network quality improvements (such as automation and electric vehicles), technology investments, and research and development (e.g., robotics and drones), the company informed bourses.
This acquisition is also expected to foster growth within the vendor ecosystem in the country. Vendors, such as those providing fleet and automation solutions, may gain the confidence to invest in assets and R&D, ultimately benefitting the overall logistics industry in India, it added.