Latest news with #EcomExpress
Mint
a day ago
- Business
- Mint
Ecom Express distress sale to Delhivery leaves minority shareholders stranded
Minority investors in Ecom Express, holding roughly 0.6% of the e-commerce logistics firm, are weighing their avenues for divesting their stakes. This follows the company's announcement of its sale to larger rival Delhivery. Delhivery's proposed acquisition of Ecom Express's majority stake—99.4% collectively owned by Warburg Pincus, Partners Group, and British International Investment (BII)—has left approximately ten minority investors, who hold the remaining 0.6% of the company, to navigate their exit options independently. Delhivery agreed to acquire the Gurugram-based company in an all-cash distress sale worth ₹1,407 crore in April. This is just a fifth of the ₹7,000 crore valuation that the company was attempting to seek through an initial public offering. Also Read: Can Ecom Express's IPO succeed when Delhivery's stock has failed to deliver 'Despite being among the first believers in the company and long-standing shareholders of Ecom Express, we were neither informed nor consulted about the proposed transaction," said Anish Jhaveri, an angel investor. Founding investors raise concerns Delhivery's proposed purchase is awaiting nod from the Competition Commission of India (CCI), besides other regulatory approvals. Jhaveri, who owns a 0.5% stake in the company, says he is exploring options. 'It would be naive to assume that the voice of minority shareholders, especially founding investors, will go unheard before the appropriate regulatory bodies, including the Ministry of Corporate Affairs and the Competition Commission of India. We are evaluating our options and expect full transparency in the interest of corporate governance and investor rights," Jhaveri added. Also Read: KKR, TPG eye Relisys Medical Devices in early-stage buyout talks Jhaveri feels that the 'waterfall mechanism" clause in investor agreements has greatly diluted his stake and that of early investors. Private equity investors typically include a 'waterfall mechanism" clause in share purchase agreements to rank the order in which shareholders will be paid in case of a sale. Those with preferred shares are allowed to take out their investment amount on priority and the capital is distributed among other shareholders after that. This becomes critical in situations where there is a distress sale. Experts weigh in on minority rights It is as yet unclear how minority investors will proceed, and whether they have enough legal standing to jeopardise the closure of the deal. According to Sudip Mahapatra, partner at law firm S&R Associates, 'the minority shareholders holding less than 1% of the target company will have very limited ability to oppose a sale of the company. If they have rights under a shareholders agreement, they might be able to make a claim. However, such minority shareholders are unlikely to have significant rights under a shareholders agreement," Mahapatra said. Partners Group, Warburg Pincus, Delhivery and BII declined to offer comments for this news story. Sanket Jain, partner at law firm Pioneer Legal, said that Delhivery is not automatically required to acquire the remaining minority stake in Ecom Express 'unless there is a specific contractual obligation to do so". Also Read: JP Morgan sees more Indian firms going shopping abroad 'However, since Delhivery now holds over 99% of Ecom Express, it is legally entitled to initiate a squeeze-out process under Section 236 of the Companies Act, 2013, enabling it to acquire the remaining shares at a fair value determined by an independent valuer. Minority shareholders who disagree with the process or valuation have the right to seek recourse before the National Company Law Tribunal or courts," Jain said. Layoffs and losses Ecom Express has seen the company's revenue take a drastic hit after the entry of e-commerce platform Meesho's logistics arm in the segment. ( Earlier, Mint reported that Ecom Express had laid off over 150 employees since the deal was announced. The company has also cut costs and shut down some centres, Mint reported. Also Read: Global PE firms eye stake in Tessolve at $300 mn valuation The company's expenses marginally rose to ₹2,921.5 crore in FY24 from ₹2,902.8 crore in FY23. Ecom Express reported a 2.2% growth in revenue to ₹2,609.2 crore in FY24, and its losses declined to ₹255.8 crore from ₹428.1 crore in the previous year.
Time of India
2 days ago
- Business
- Time of India
Ecommerce's in-house delivery turn flips third-party logistics biz script
The largest Indian ecommerce firms have moved deliveries in-house, hurting third-party logistics (3PL) players and leading to a consolidation in the sector. Amazon , Flipkart and Meesho now account for about 82% of India's ecommerce parcel volumes, according to a report by ICICI Securities. This has forced pure-play logistics operators to draw up new ways to stay relevant. As Meesho's parcel volumes are increasingly handled by its logistics arm Valmo, improving yields has become more important than chasing market share for 3PL companies, executives and analysts said. The Bengaluru-based online retailer, which caters to smaller towns and value-conscious shoppers, had historically worked with logistics providers including Delhivery , Ecom Express, Shadowfax and Xpressbees. Now, Valmo functions as an aggregator and allows sellers to choose a transporter to fulfil orders. 'Our channel checks indicate Meesho was routing around 70% of shipments through its captive arm Valmo in March 2025 compared to around 30% in March 2024, and 5% in March 2023. This indicates the growing control of horizontal platforms over logistics operations,' ICICI Securities said. Delhivery CEO Sahil Barua said at the company's recent earnings call that more than 100% of the logistics industry's profit pool currently resides with Delhivery, underscoring how many rivals remain loss-making. He said further consolidation is likely after the Rs 1,407 crore Ecom Express acquisition in April. 'Despite Delhivery handling a large share of Meesho volumes, the impact on others may be more significant. Delhivery has already begun focusing on yields and exploring segments like rapid commerce and hyperlocal delivery,' said a senior executive at a logistics firm. Delhivery's acquisition of Ecom Express strengthens its position in the 3PL space, with the two companies having 100% customer overlap and 95% revenue overlap. For Ecom Express, key clients include Meesho, Amazon, Shiprocket and Nykaa. Delhivery's strategy Analysts said Meesho was unlikely to shift all parcel volumes to its own network, which could give Delhivery some pricing power. 'Delhivery's muted growth in ecommerce shipments in FY25 was driven by competitors undercutting on price. But with consolidation playing out, it may regain pricing leverage,' said a Mumbai-based internet analyst. The company's express parcel revenue and volumes rose 5% and 2% year-on-year, respectively, in FY25. Barua acknowledged pricing pressure from rivals but said it should ease. 'Historically, Delhivery has led pricing in this industry. Last year was an exception,' he said. 'Competitors made pricing decisions to gain short-term share, which we believed were unsustainable as they implied negative gross margins.' JM Financial analysts said headwinds for Delhivery may subside in the coming quarters as Meesho has limited scope for further shifting volumes and quick commerce firms are slowing down expansion. 'Management expects growth to return in FY26 with the Ecom Express acquisition, retaining over 30% of volumes. Positive impact was already visible in April and May,' the report noted.
Economic Times
2 days ago
- Business
- Economic Times
Ecommerce's in-house delivery turn flips third-party logistics biz script
The largest Indian ecommerce firms have moved deliveries in-house, hurting third-party logistics (3PL) players and leading to a consolidation in the sector. Amazon, Flipkart and Meesho now account for about 82% of India's ecommerce parcel volumes, according to a report by ICICI Securities. This has forced pure-play logistics operators to draw up new ways to stay relevant. As Meesho's parcel volumes are increasingly handled by its logistics arm Valmo, improving yields has become more important than chasing market share for 3PL companies, executives and analysts said. The Bengaluru-based online retailer, which caters to smaller towns and value-conscious shoppers, had historically worked with logistics providers including Delhivery, Ecom Express, Shadowfax and Xpressbees. Now, Valmo functions as an aggregator and allows sellers to choose a transporter to fulfil orders. 'Our channel checks indicate Meesho was routing around 70% of shipments through its captive arm Valmo in March 2025 compared to around 30% in March 2024, and 5% in March 2023. This indicates the growing control of horizontal platforms over logistics operations,' ICICI Securities CEO Sahil Barua said at the company's recent earnings call that more than 100% of the logistics industry's profit pool currently resides with Delhivery, underscoring how many rivals remain loss-making. He said further consolidation is likely after the Rs 1,407 crore Ecom Express acquisition in April. 'Despite Delhivery handling a large share of Meesho volumes, the impact on others may be more significant. Delhivery has already begun focusing on yields and exploring segments like rapid commerce and hyperlocal delivery,' said a senior executive at a logistics firm. Delhivery's acquisition of Ecom Express strengthens its position in the 3PL space, with the two companies having 100% customer overlap and 95% revenue overlap. For Ecom Express, key clients include Meesho, Amazon, Shiprocket and Nykaa. Also Read: Delhivery rolls out intracity services for customers in Bengaluru Delhivery's strategy Analysts said Meesho was unlikely to shift all parcel volumes to its own network, which could give Delhivery some pricing power. 'Delhivery's muted growth in ecommerce shipments in FY25 was driven by competitors undercutting on price. But with consolidation playing out, it may regain pricing leverage,' said a Mumbai-based internet analyst. The company's express parcel revenue and volumes rose 5% and 2% year-on-year, respectively, in FY25. Barua acknowledged pricing pressure from rivals but said it should ease. 'Historically, Delhivery has led pricing in this industry. Last year was an exception,' he said. 'Competitors made pricing decisions to gain short-term share, which we believed were unsustainable as they implied negative gross margins.'JM Financial analysts said headwinds for Delhivery may subside in the coming quarters as Meesho has limited scope for further shifting volumes and quick commerce firms are slowing down expansion.'Management expects growth to return in FY26 with the Ecom Express acquisition, retaining over 30% of volumes. Positive impact was already visible in April and May,' the report noted.
Time of India
2 days ago
- Business
- Time of India
Ecommerce's in-house delivery turn flips third-party logistics biz script
Delhivery CEO Sahil Barua said during the company's recent earnings call that further consolidation in the industry is likely after the sale of Ecom Express to Delhivery for Rs1,407 crore in April. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The largest Indian ecommerce firms have moved deliveries in-house, hurting third-party logistics (3PL) players and leading to a consolidation in the sector. Amazon , Flipkart and Meesho now account for about 82% of India's ecommerce parcel volumes, according to a report by ICICI Securities. This has forced pure-play logistics operators to draw up new ways to stay Meesho's parcel volumes are increasingly handled by its logistics arm Valmo , improving yields has become more important than chasing market share for 3PL companies, executives and analysts said. The Bengaluru-based online retailer, which caters to smaller towns and value-conscious shoppers, had historically worked with logistics providers including Delhivery , Ecom Express, Shadowfax and Xpressbees. Now, Valmo functions as an aggregator and allows sellers to choose a transporter to fulfil orders.'Our channel checks indicate Meesho was routing around 70% of shipments through its captive arm Valmo in March 2025 compared to around 30% in March 2024, and 5% in March 2023. This indicates the growing control of horizontal platforms over logistics operations,' ICICI Securities CEO Sahil Barua said at the company's recent earnings call that more than 100% of the logistics industry's profit pool currently resides with Delhivery, underscoring how many rivals remain loss-making. He said further consolidation is likely after the Rs 1,407 crore Ecom Express acquisition in April.'Despite Delhivery handling a large share of Meesho volumes, the impact on others may be more significant. Delhivery has already begun focusing on yields and exploring segments like rapid commerce and hyperlocal delivery,' said a senior executive at a logistics firm. Delhivery's acquisition of Ecom Express strengthens its position in the 3PL space, with the two companies having 100% customer overlap and 95% revenue overlap. For Ecom Express, key clients include Meesho, Amazon, Shiprocket and said Meesho was unlikely to shift all parcel volumes to its own network, which could give Delhivery some pricing power. 'Delhivery's muted growth in ecommerce shipments in FY25 was driven by competitors undercutting on price. But with consolidation playing out, it may regain pricing leverage,' said a Mumbai-based internet company's express parcel revenue and volumes rose 5% and 2% year-on-year, respectively, in FY25 Barua acknowledged pricing pressure from rivals but said it should ease. 'Historically, Delhivery has led pricing in this industry. Last year was an exception,' he said. 'Competitors made pricing decisions to gain short-term share, which we believed were unsustainable as they implied negative gross margins.'JM Financial analysts said headwinds for Delhivery may subside in the coming quarters as Meesho has limited scope for further shifting volumes and quick commerce firms are slowing down expansion.'Management expects growth to return in FY26 with the Ecom Express acquisition, retaining over 30% of volumes. Positive impact was already visible in April and May,' the report noted.
Time of India
17-05-2025
- Business
- Time of India
Delhivery posts Rs 72 crore Q4 profit despite moderate revenue growth
New-age logistics company Delhivery has reported a 5% year-on-year increase in operating revenue for the March quarter to Rs 2,191 crore, missing analyst estimates of 10-12% business growth. However, the Gurgaon-based firm's bottomline continued to improve, as it posted a quarterly net profit of Rs 72 crore. It had posted Rs 68-crore net loss in the fourth quarter a year ago. The overall tepid growth in business came on the back of flattish performance of Delhivery 's express parcel segment, which is its biggest vertical. In the fourth quarter, the company's express parcel volume grew by 1% year-on-year but showed a 14% decline sequentially. Revenue from this segment, through which the company delivers ecommerce parcels, grew 3% y-o-y to Rs 1,256 crore, while quarter-on-quarter it was down by 16%. The financial year ending March 2025 was Delhivery's first full year in which it reported profit after tax. For FY25, Delhivery's operating revenue came in at Rs 8,932 crore, a 9.7% increase from FY24, while it clocked net profit of Rs 162 crore. In fiscal 2024, it had reported a net loss of Rs 249 crore. 'We continue to deliver steady performance in our core transportation businesses. Our ongoing measures to improve profitability are visible in Q4 numbers and we expect continued momentum on this front as growth picks up in FY26,' said Sahil Barua, cofounder and chief executive officer of Delhivery. During an analyst call, Barua, who has previously highlighted slow growth in the ecommerce shipment market, said Delhivery is prioritising growth over overall market expansion. Last month, the company said it would be acquiring Ecom Express for Rs 1,407 crore. The transaction is pending approval from the Competition Commission of India. If the deal is approved, it will be one of the biggest consolidation moves in the domestic logistics sector. Delhivery has said it expects the overlapping customer base to help streamline the integration process. Barua said that despite the acquisition, 'there are still too many players' in the third-party logistics market, adding that Delhivery has 'more than 100% of the industry's profit pool', since many of the players are still loss-making . On Friday, shares of Delhivery closed 0.9% lower on the BSE at Rs 321. The results were declared after market hours. Rapid commerce expansion The company entered the rapid commerce space in January this year as a response to the fast-growing quick commerce sector. As a part of this new segment, Delhivery is offering shared warehouse services to direct-to-consumer (D2C) brands with a two-hour delivery window. Ajith Pai, Delhivery's chief operating officer, said on Friday that the company has 18 such dark stores in three cities—Bengaluru, Chennai and Hyderabad—and plans to have 50 dark stores on its rapid commerce network during the fiscal. In comparison, quick commerce platforms including Blinkit, Zepto and Swiggy Instamart together have 3,000–4,000 dark stores or micro warehouses on their networks. Pai said that some of the older dark stores are now clocking 400–500 orders every day. The foray into rapid commerce services had a bearing on Delhivery's supply chain services' profitability, with FY25 margins for this segment falling to 2.2% against 6.8% in FY24.
