Priyanka Tiwari
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Ecom Express competes with Delhivery and was acquired by Delhivery for ₹1,407 crore. Delhivery remarked that acquiring Ecom Express will improve its scale and profitability. In a regulatory filing dated the 11th of April, Delhivery tried to alleviate the concerns that analysts and shareholders had regarding the integration and the financial impact of the deal.
Denotes that the Ecom Express merger will have virtually no integration risk due to an existing overlap in operations and customer base, ensuring that the deal is simpler to integrate compared to the tailored merger of SpotOn Logistics in 2021.
Why Integration Will Be Smoother Than SpotOn
Delhivery noted that this deal offers complete overlap on customers and revenue with Ecom Express. More than 95% of revenue and customer accounts are in alignment with Delhery making the integration technologically less intensive.
Integration of new clients and managing higher PTL (Partial Truck Load) volumes also made the SpotOn acquisition challenging.
Express Parcel volumes of Ecom Express account for approximately 40% of Delhery’s.
Total network tonnage of Delhery is under 20% while SpotOn’s were twice as Delhery’s PBM at the time of the acquisition.
Delhivery’s Operational Efficiency With Employee Retention
The company plans to keep a significant part of Ecom Express’ trained workforce, proficient in logistics functions including picking, sorting, loading, delivery, cash collection, and other vital logistics tasks.
“This gives us scope under our natural attrition rate to take on skilled Ecom staff without increasing headcount,” Delhivery said, citing its rationale built off Ecom’s existing workforce as a salient feature during this move.
Profitability and Capex Effectiveness Forecasted To Enhance
Delhivery anticipates capex intensity to decline along with an increase in EBITDA margin post-acquisition. Ecom Express, which owns infrastructure worth approximately ₹450 crores, faces a lack of effective utilization. Assets like IT systems and sorting machinery will be relocated to support growth from FY27 to FY29.
Main Highlights:
Cost savings from underutilized assets — capex identified as ₹200 crores
Greater network optimization alongside reduction of administrative costs
Ecom Express retained revenues will lead to greater EBITDA margin than Ecom Express.
In Waiting For Regulatory Approval
The deal is still undergoing scrutiny by the Competition Commission of India (CCI). If the acquisition gets sanctioned, it should be completed in less than six months barring any delays.
Delhery strongly believes this move will enhance the company’s dominance over the logistics industry in India and provide value to shareholders in the long run.
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