Delhivery acquired Ecom Express at 80% valuation discount. Know all the key details of the update
As per a Mint report, Ecom Express had laid off nearly 500 employees in February and paused its plans to launch an initial public offering (IPO) of its shares in an attempt to cut costs. Post this struggle, Ecom Express agreed on being acquired at an 80% slashed valuation.
The transaction, approved by both companies' boards, is anticipated to close within six months, subject to regulatory approvals from the Competition Commission of India (CCI).
Ecom Express held a 27% shipment market share in FY24, trailing Delhivery, but struggled with low operating leverage and heavy reliance on a few clients—75% of sales came from its top five, versus 34% for Delhivery, according to Storyboard18 report.
Delhivery alleged Ecom Express inflated shipment numbers and hid costs in its representations to investors and regulators, Inc2 reported.
Merging two logistics giants with different tech stacks and operations could lead to operational chaos.
With Blinkit, Zepto, and Shiprocket scaling up, the deal’s strategic advantage is under scrutiny.
The target company’s unpaid dues and liabilities are making Delhivery reconsider the risks.
Post-pandemic, sector growth has slowed, reducing the urgency for consolidation.
Key executives like former MD and CEO Ajay Chitkara leaving before the deal has raised concerns.
Delhivery’s share price dipped amid deal uncertainty, reflecting investor skepticism.
