The Business Profile of the Ecom Express Limited
Ecom Express is India's only pure-play B2C e-commerce logistics solutions provider. Company’s pan-India express logistics network covers first-mile pick-up, mid-mile transportation, last-mile delivery, returns, and warehousing. As of March 31, 2024, we had the widest coverage pan-India and in Tier 2+ regions compared to its competitors and cover over 27,000 PIN codes.
The B2C e-commerce market in India has strong long-term growth prospects and is expected to grow at a CAGR of 21% over the next five years. Ecom have second-largest market share among its peers in terms of B2C e-commerce shipments and handled over 27% of all B2C e-commerce shipments through third-party logistics providers in India.
The growth in B2C e-commerce shipments is increasingly coming from Tier 2+ regions, whose contribution to B2C e-commerce shipments grew to 62% in the Financial Year 2024 and is further expected to grow at a CAGR of 35% until the Financial Year 2029 and contribute to 70-80% of B2C e-commerce shipments. As of March 31, 2024, we had 6,384 active customers.
The Main Objectives to Launch the Ecom Express Limited IPO
As per the draft red hearing prospects, the IPO issue consists of both Offer for sale and fresh issue by the company.
- The offer for sale (OFS) consists of up to [●] equity shares aggregating up to ₹13,155.00 million. Nothing from those proceeds of OFS will be allotted to company.
- ECOM Express IPO issue also have a fresh issue of ₹12,845.00 million. The utilization of funds has been mentioned I table below.
| Particulars | Total estimated Amount/ expenditure
(in Millions) |
| Capex towards set-up of new processing centers
with automation and new fulfillment centers |
3874.41 |
| Investment in computers and IT equipment | 737.12 |
| Investing in enhancement of
technological and data science capabilities |
2392.3 |
| Repayment of certain borrowings
availed of by our Company |
879.19 |
| General corporate purposes | [●] |
| Total Net Proceeds | [●] |
IPO Details of Ecom Express Limited:
| IPO Open Date | Not announced |
| IPO Close Date | Not announced |
| Basis of Allotment | Not announced |
| Listing Date | Not announced |
| Face Value | ₹1 per share |
| Price | Not announced |
| Lot Size | Not announced |
| Total Issue Size | Up to [●] Equity Shares |
| Aggregating up to ₹ 10,850 million | |
| Fresh Issue | Up to [●] Equity Shares |
| Aggregating up to ₹ 12,845.00 million | |
| Offer For Sale | Up to [●] Equity Shares |
| Aggregating up to ₹13,155.00 million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not less than 75% of the Net Issue |
| Retail Shares Offered | Not more than 10% of the Net Issue |
| NII (HNI) Shares Offered | Not more than 15% of the Net Issue |
Ecom Express Limited IPO Issue Price & Size
The issue price of Ecom Express Limited hasn’t been released yet. Upon releasing the dates, the investors can bid between these price ranges. The company has an OFS of up to [●] equity shares consisting of Rs. 1315.50 crores and fresh issue of Rs. 1085 crores.
Launch Date of Ecom Express Limited IPO
The IPO of Ecom Express Company is launching on (Opening Date XXXX), hence the opening date for bidding is (Open Date) and the IPO is closing on (Closing Date). Investors can bid in this IPO between these days during the primary market hours.
Ecom Express Limited Financial Statements
| Particulars | 2024 | 2023 | 2022 |
| Revenue | |||
| Revenue from operations | 26091.6 | 25539.32 | 20918.9 |
| Other income | 437.31 | 215.94 | 290.07 |
| Total income | 26528.9 | 25755.26 | 21209 |
| Expenses | |||
| Cost of services | 19899 | 13867.45 | 11339.5 |
| Employee benefits expense | 6032.96 | 6640.05 | 5136.45 |
| Finance costs | 859.8 | 876.02 | 408.45 |
| Depreciation and amortisation expenses | 2216.14 | 2116.33 | 1325.19 |
| Net loss on fair valuation of financial
liability carried at fair value |
1083.87 | 529.35 | - |
| Other expenses | 5123.72 | 4999.11 | 3610.15 |
| Total expenses | 29215.5 | 29028.32 | 21819.7 |
| Loss from continuing operations | -2485.1 | -3598.51 | -463.33 |
| Discounted operations: | |||
| Loss from discontinued operations before tax | -72.06 | -755.59 | -462.15 |
| Tax expense of discontinued operations | 1.6 | -72.75 | -11.54 |
| Loss from discontinued operations | -73.66 | -682.84 | -450.61 |
| Loss for the year | -2558.8 | -4281.35 | -913.94 |
| Particulars | FY24 | FY23 | FY22 |
| Shipments handled (in million) | 514.41 | 468.23 | 372.32 |
| Metro (% of total number of shipments handled) | 10.52% | 9.11% | 8.20% |
| Tier 1 (% of total number of shipments handled) | 7.69% | 7.59% | 7.31% |
| Tier 2+ (% of total number of shipments handled) | 81.79% | 83.30% | 84.49% |
| Revenue from operations (₹ in million) | 26091.6 | 25539.32 | 20918.9 |
| Service EBITDA (₹ in million) | 3303.93 | 2078.93 | 2110.37 |
| Number of large facilities and delivery centers | 3738 | 3413 | 3185 |
| Automation – Sorters (Numbers) | 33 | 33 | 15 |
| Operating cost per shipment (in ₹) | 39.65 | 45.4 | 47.33 |
| Active Customer | 6384 | 3799 | 2409 |
| Number of on roll and contractual employees | 38171 | 36693 | 53273 |
| Number of gig workers | 32029 | 24545 | 15479 |
Ecom Express Limited Promoters & Shareholding
There are 6 promoters as of date of filing DRHP, the aggregate shareholding of promoters constitutes 81.55% of the pre-offer equity share capital on a fully diluted basis (calculated on the basis of 32,871,620 Equity Shares, conversion of 10,536,409 preference Shares and exercise of 55,899 options vested under the Ecom ESOP Scheme)
| Name of Shareholders | Maximum % of pre-Offer paid-up Equity Share capital on a fully diluted basis | Maximum aggregate proceeds from the Offered Shares
(in ₹ million) |
| Promoters (also the Promoter Selling Shareholders) | ||
| Kotla Satyanarayana | 0.20% | 3.38 |
| Manju Dhawan | 1.61% | 89.8 |
| Kotla Sridevi | 2.51% | 76.21 |
| Kotla Rathnanjali | 0.34% | 10.21 |
| Eaglebay Investment Ltd | 27.13% | 2114.87 |
| PG Esmeralda Pte. Ltd. | 49.76% | 9313.92 |
| Promoter Group | ||
| Nikhil Jawa | 0.00% | |
| Lepakshi Sachdeva | 1.43% | |
| Investor Selling Shareholder | ||
| British International Investment plc (erstwhile CDC Group plc | 10.03% | 1369.71 |
| Other Selling Shareholders | ||
| Jayanti Krishnan | 0.95% | 89.8 |
| Rabeya Saxena | 2.53% | 76.88 |
| Saheba Saxena | 0.34% | 10.21 |
| Total | 96.84% | 13155 |
Should You Subscribe to Ecom Express Limited IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Ecom Express Limited:
Pure-play B2C e-commerce logistics solution provider
Ecom express is India's only pure-play B2C e-commerce logistics provider. The company has pan-India reach covering over 27,000 PIN codes and approximately 97% of population with network of 317 large facilities and 3,421 delivery centers. As of FY24, it had the 2nd largest market share among its peers and handled over 27% of all 3PL B2C e-commerce shipments in India in the Financial Year 2024.
The e-commerce market has strong growth prospects as people have become addicted to online shopping. So as to cater growing demand of growing online shoppers, the scope of growth logistics service providers is visible.
Deep penetration in Tier-2 regions
The company has pan-India reach covering over 27,000 PIN codes and approximately 97% of population. The growth in B2C e-commerce shipments is increasingly coming from Tier 2+ regions and the company has highest coverage in Tier 2+ regions in terms of PIN codes. This far reach presence contributed to B2C e-commerce shipments from 56% in the FY21 to 62% in the FY24. This growth is further expected to go at CAGR of 35% until the FY29, contributing to 70-80% of B2C e-commerce shipments.
To expand their market reach to these locations, e-commerce platforms have to rely on third-party logistics providers, as captive logistics functions can only deliver to significantly fewer PIN codes. Third-party logistics providers cater to approximately 27,000 PIN codes compared to the approximately 12,000 PIN codes which captive logistics are able to cover.
In the Financial Year 2024, we picked-up shipments from over 580,000 unique touch points across India, of which 86.23% were in Tier-2+ regions. In 48.34% of Tier 2+ lanes that we serviced, shipments increased by over 100% over the last three Financial Years, indicating consumer growth in e-commerce and customer satisfaction with our delivery capabilities.
| Particulars | FY24 | FY23 | FY22 |
| Number of shipments handled (in millions) | 514.41 | 468.23 | 372.31 |
| Metro (% of total number of shipments handled) | 10.52% | 9.11% | 8.20% |
| Tier 1 (% of total number of shipments handled) | 7.69% | 7.59% | 7.31% |
| Tier 2 (% of total number of shipments handled) | 81.79% | 83.30% | 84.49% |
| Lanes served across India (in thousands) | 6243 | 5746 | 5521 |
| Metro (% of total number of lanes served) | 7.09% | 7.16% | 7.17% |
| Tier 1 (% of total number of shipments handled) | 6.68% | 6.85% | 6.76% |
| Tier 2 (% of total number of shipments handled) | 86.23% | 85.99% | 86.07% |
Asset-light business model
The company operates an asset-light model that can be scaled and adapted based on customer requirements, optimizing margins despite market trends. As of March 31, 2024, the company has 317 leased and rented large facilities and 3,421 delivery centers. Additionally, the company has grown its pool of gig delivery executives, with 71.42% of deliveries completed by their workforce in the Financial Year 2024.
Despite being asset light, the company maintains operational control over its facilities and operations using technology to ensure consistent service standards. The network infrastructure is designed to respond to fluctuations in customer order volumes, allowing for rapid resource addition to meet peak demand. AI is used to determine the location of processing centers, improving network efficiency. All facilities have a fleet of vehicles to ensure connectivity at all times.
Risk Factors of Ecom Express Limited:
Dependent on the growth of the e-commerce industry
The top three horizontal platforms, Meesho, Flipkart, and Amazon, contribute to 79% of total B2C e-commerce horizontal GMV for the Financial Year 2024. However, uncertainties in the growth, profitability, and regulatory regime of the e-commerce industry in India could significantly impact our business.
Concentration of revenue
As can be seen from data presented in table below. The company derives a significant portion of its revenue from operations from top customer groups, including Meesho, Amazon, Shiprocket, Roposo, and Nykaa. Any adverse impact on clients business or failure to maintain relationship with top clients can directly impact business aspects and financial of company.
| Particulars | FY24 | FY23 | FY22 |
| Revenue from top ten customer groups | 84.23% | 86.67% | 84.10% |
| Revenue from top five customer groups | 75.16% | 82% | 78.76% |
| Revenue from top customer | 52.15% | 46.56% | 29% |
History of losses
The company has experienced losses and negative cash flows in the past and may continue to do so in the future. During FY23 and FY22 the company burned cash from operating activities but in FY24, the company has earned cash from operations.
| Particulars | FY24 | FY23 | FY22 |
| Loss for the year | -2558.75 | -4281.35 | -913.94 |
| Net cash from/(used in) operating activities including discontinued operations | 3133.22 | -495.85 | -635.14 |
| Net cash used in investing activities including discontinued operations | -482.26 | -1834.83 | -592.04 |
| Net cash (used in)/from financing activities including discontinued operations | -2774.86 | 2801.85 | 2365.3 |
Scaling hindrance
The company operates a nationwide logistics network infrastructure and scaling that network infrastructure to new location is crucial for growth. Expansion certainly requires significant funds and so maintaining the network infrastructure may be unsuccessful, as rapid expansion may lead to financial difficulties in a business downturn.
Third party contract workers
The company depends on third-party equipment suppliers to maintain its equipment, including sorters, under annual maintenance contracts. As of March 31, 2024, the company employed 15,616 full-time employees and utilized 22,555 off-roll employees on a contractual basis and 32,029 gig workers. If any such supplier terminates its relationship or refuses to renew its contracts or charge higher prices, particularly during peak seasons, the company may struggle to secure similar or acceptable terms or replace them in an acceptable time frame. This reliance on third parties may limit the company's ability to scale its business during peak seasons when trucks and manpower are in short supply.
Ecom Express Limited Grey Market premium
The Ecom Express Limited IPO GMP is not yet known as the IPO price is not disclosed. Once the IPO is open, the price will be disclosed and as per the demand and supply of the share price in the open market, the Ecom Express Limited IPO GMP will be known. If the IPO price is undervalued, less GMP and as per the valuation of the stock overvalued there is less chance for higher GMP.
