Ecom Express sees 150 workers resign forward of its acquisition by Delhivery

“CCI’s approval is prone to come by means of within the subsequent 45 days,” stated one of many individuals, including that a number of workers have resigned voluntarily. “Lot of roles will grow to be redundant after the acquisition so there shall be workers opting out, establishing greater value financial savings,” the second particular person stated.

A spokesperson for Ecom Express stated the corporate was not ready to remark whereas it awaited regulatory approval. Delhivery, too, stated it had no touch upon the matter, whereas Chitkara didn’t instantly reply to Mint’s queries.

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During Delhivery’s earnings name this month, CEO and managing director Sahil Barua stated, “The common attrition in Delhivery’s community itself will present us enough space to soak up all certified workers from Ecom Express in our operations across the nation.” He added that they might bear rigorous coaching through the onboarding course of, and that the acquisition consideration included about about ₹300 crore in integration prices.

In April, Delhivery introduced it had signed a definitive settlement to amass a controlling stake in Ecom Express Limited for about ₹1,400 crore in money. Less than a yr in the past, Ecom Express was valued round ₹7,000 crore. The acquisition is awaiting approval from CCI, after which Ecom Express will grow to be a subsidiary of Delhivery.

‘More consolidation forward’

The logistics large, which utilized for CCI’s approval on 19 April, believes there may very well be extra consolidation within the supply ecosystem, and that the period of “suicidal pricing” available in the market has ended. “There have been too many gamers on this market within the earlier quarter. Our acquisition of Ecom Express has not modified that dynamic. There are nonetheless too many gamers available in the market,” Barua stated through the earnings name earlier this month. He added that the survival of those firms, that are nonetheless unprofitable, will depend on how a lot capital they’ve left.

“I believe what this deal has finished is sign that if you’re a loss-making community in specific parcel with no path to profitability, consolidation or exit is an inevitable end result,” Barua stated. He anticipated that with this acquisition and consolidation, there can be extra progress in Delhivery’s parcel volumes.

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For context, Ecom and Delhivery have almost 100% overlap of consumers, which suggests all prospects that work with Ecom Express are already deeply built-in and conversant in Delhivery’s operational and billing processes and that collections and reconciliation are additionally comparable.

Comparing the size of the 2 firms, Barua stated through the earnings name that Ecom Express’s specific parcel volumes have been about 40% of Delhivery’s, and that it community tonnage was lower than 20% of Delhivery’s.

Delhivery stated it expects to retain a restricted portion of Ecom Express’s community. It will retain amenities in places the place both its personal capability is constrained, or the place it’s possible to repurpose an current transportation facility right into a Delhivery success centre or service centre. It additionally clarified that no extra expertise can be required to combine these amenities into Delhivery’s community.

From IPO desires to acquisition

Ecom Express was beforehand slated to go public, and filed draft papers final August to boost ₹2,600 crore in an preliminary public providing (IPO). This included a contemporary infusion of shares value ₹1,284.5 crore and a proposal on the market that may enable a few of its distinguished traders similar to Warburg Pincus and British International Investment to dump a few of their shares.

However, it paused its IPO plans earlier this year and laid off nearly 500 employees to chop prices. Still, it confronted a stiff problem from rivals similar to Delhivery and XpressBees, which have their very own fleets and supply different companies, together with business-to-business logistics. Its downfall was additionally due partially to its heavy reliance (greater than 50%) on Meesho, which constructed its personal in-house logistics unit, Valmo, making it tough to interchange the misplaced enterprise.

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As many of those firms additionally compete in business-to-consumer e-commerce logistics, a value warfare has damaged out, sparking hypothesis of additional consolidation within the business.

For FY24, Ecom Express reported 2.2% progress in income to ₹2,609.2 crore and narrowed its loss to ₹255.8 crore from ₹428.1 crore within the yr earlier than. In the primary 9 months of FY25 it made an total lack of ₹184 crore and an adjusted-Ebitda lack of ₹104 crore, Barua stated within the earnings name.

Delhivery turned worthwhile for the primary time in FY25, posting a internet revenue of ₹72.6 crore as income rose 6% year-on-year.