crashed 8% on Tuesday, April 8, to an intraday low of Rs 247.10 on the BSE, amid the company’s plans to acquire rival Ecom Express in an all-cash deal worth Rs 1,407 crore.This marks one of the biggest consolidation moves in the Indian logistics sector.
The acquisition reflects a steep decline in valuation for Gurgaon-based Ecom Express, which was valued at over Rs 7,000 crore as of June 2024. The company had shelved its IPO plans last year due to business challenges, leading to what is now seen as a distress sale.
The roughly 80% plunge in valuation underscores broader challenges within the logistics sector, particularly for companies focused on e-commerce deliveries. Ecom Express also struggled to scale beyond the online retail segment.
As part of the deal, private equity firms Warburg Pincus, Partners Group, and British International Investment will fully divest their holdings. Delhivery will acquire a 99.4% stake in Ecom Express, pending regulatory approval.
Delhivery believes the acquisition will help expand its operations and strengthen its competitive edge in the logistics sector.Also read:
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Delhivery’s acquisition of Ecom Express for Rs 1,400 crore values the company at 0.6x EV/sales and positions the combined entity as the dominant player in the 3PL B2C express segment, with a 55–60% market share—nearly three times that of its closest competitor.
While the deal offers strong scale and cost synergy potential, especially in last-mile operations, it is not expected to be earnings accretive in the near term. The integration is expected to be smooth, supported by overlapping customer bases and Delhivery’s prior experience with the Spoton acquisition. However, Meesho’s push toward in-house logistics could weigh on volume growth in the short term.
Delhivery’s board has approved the acquisition of Ecom Express through a share purchase agreement, with the deal expected to close within six months, pending approval from the Competition Commission of India (CCI). Post-acquisition, Ecom Express will operate as a subsidiary of Delhivery.
The consolidation is expected to improve pricing discipline across the logistics ecosystem and enhance key performance metrics for the merged entity. JM Financial views the acquisition as a strong positive trigger, noting that the current market price implies a 20x FY27E pre-IndAS adjusted EBITDA multiple (pre-acquisition).
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
