What is the Impact of Ecom Express's Acquisition by Delhivery?
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Synopsis
The unexpected acquisition of Ecom Express by Delhivery has left minority shareholders bewildered and board members enraged. This article delves into the details of the deal, its implications, and the reactions from various stakeholders, revealing a significant shift in the landscape of India's logistics sector.
Key Takeaways
- Ecom Express transitions from IPO plans to acquisition.
- Delhivery acquires a 99.44 percent stake for up to Rs 1,400 crore.
- Minority shareholders left blindsided by the deal.
- Potential restructuring may affect around 150 employees.
- Surprising move given prior regulatory approval for IPO.
New Delhi, June 6 (NationPress) Ecom Express, once hailed as a promising player in India's e-commerce logistics sector, has shifted from plans for an IPO to what many are describing as a 'fire sale'—leaving minority shareholders caught off guard and independent board members outraged.
The unfolding situation began to come to light during the 24th Extraordinary General Meeting (EGM) of Ecom Express, which was held virtually, according to various reports.
During the meeting, the Chairman and Independent Director, V. Anantharaman, reportedly revealed that a deal was finalized in April 2025 for Delhivery to acquire nearly the entire firm.
Anantharaman raised alarms that the agreement was struck without the knowledge of the company's board or its minority investors.
Subsequently, he resigned from his position as Chairman. Following his departure, Ecom Express CEO Ajay Chitkara took over the meeting's proceedings.
The acquisition entails Delhivery purchasing a 99.44 percent stake in Ecom Express for a cash consideration of up to Rs 1,400 crore.
However, reports suggest that the actual cost is closer to Rs 1,100 crore, given that Ecom Express had Rs 300 crore in cash reserves, which Delhivery intends to utilize for post-deal integration.
This values the company at roughly 0.5 times its annual revenue, which exceeds Rs 2,500 crore—a lower multiple than typically observed within the logistics industry.
Ecom Express had earlier obtained regulatory approval from SEBI to proceed with an IPO, making this acquisition a surprising turn of events.
This shift has reportedly led to resignations from approximately 150 mid-level and regional operations staff in anticipation of integration with Delhivery.
While these departures are being termed voluntary, sources indicate potential restructuring and role redundancies could occur soon.
Founded in 2012 and headquartered in Gurugram, Ecom Express has secured over $290 million in funding, establishing itself as a comprehensive, technology-driven logistics provider.
As of now, neither Delhivery nor Ecom Express has responded to these reports.
Point of View
I believe the acquisition of Ecom Express by Delhivery raises significant questions about transparency and governance in the e-commerce logistics sector. The unexpected nature of this deal underscores the need for more robust communication with stakeholders. Nation stands firmly in advocating for accountability and clarity in corporate actions.
NationPress
07/06/2025
Frequently Asked Questions
What led to the acquisition of Ecom Express by Delhivery?
Ecom Express's transition from an IPO plan to a sale was driven by strategic decisions made by its board, which ultimately culminated in the acquisition by Delhivery.
How much did Delhivery pay for Ecom Express?
Delhivery is acquiring a 99.44 percent stake in Ecom Express for cash consideration of up to Rs 1,400 crore, although the actual cost is closer to Rs 1,100 crore.
What are the implications for Ecom Express employees?
The acquisition has reportedly led to the resignation of around 150 mid-level and regional staff, with potential restructuring expected in the near future.
Why was the acquisition surprising?
The acquisition surprised many as Ecom Express had recently received regulatory approval to go public, indicating a shift in strategy.
What does this mean for the logistics industry?
This acquisition could reshape the competitive landscape of the logistics industry in India, particularly in how companies approach funding and growth.
