IPO-Bound Startup’s Loss Narrows 67% To INR 255.8 Cr

SUMMARY

Ecom Express’ operating revenue saw a marginal 2.15% increase to INR 2,609 Cr in FY24 from INR 2,553.9 Cr in the previous fiscal year

In line with the revenue, the total expenses of the logistics startup were flat at INR 2,921.5 Cr during the year under review

Ecom Express has filed its DRHP with SEBI for an INR 2,600 Cr IPO, of which up to INR 1,284.5 Cr will be raised through a fresh issuance of shares

IPO-bound logistics startup Ecom Express managed to reduce its net loss by 67% year-on-year (YoY) during the financial year ended March 31, 2024. Its consolidated loss decreased 67% to INR 255.8 Cr in the financial year 2023-24 (FY24) from INR 428.1 Cr in FY23.

Of this, Ecom Express’ loss from continuing operations stood at INR 248.5 Cr in FY24 as against INR 359.8 Cr in the previous year. Meanwhile, loss from discontinued operations was at INR 7.4 Cr during the year under review as against INR 68.3 Cr in FY23.

The loss from discontinued operations refers to loss from Paperfly Private Limited, a partly owned subsidiary in Bangladesh. Ecom Express said it decided to exit from its investment in Paperfly in FY23.

“… the holding company on 7 July 2024 has entered into a SHA termination agreement, thereby selling the entire shareholding in Paperfly Private Limited as per Form 117 – Instrument of transfer of shares for a total consideration of INR 11.44 Mn (received on 16 July 2024 ),” it said.

Revenue Stays Almost Flat

Meanwhile, the startup’s operating revenue saw a marginal 2.15% increase to INR 2,609 Cr in FY24 from INR 2,553.9 Cr in the previous fiscal year, as per its draft red herring prospectus (DRHP).

Founded in 2012 by the late TA Krishnan, Manju Dhawan, K Satyanarayana and Sanjeev Saxena, Ecom Express is a pure play B2C ecommerce logistics solutions provider. It generates revenue by serving customers in the ecommerce industry, including horizontal, vertical, D2C, and quick commerce platforms in India.

Including other income, total revenue increased 3% to INR 2,652.8 Cr in FY24 from INR 2,575.5 Cr in the previous fiscal year.

In the DRHP, Ecom Express said that it will continue to make investments in its business and this may lead to it continuing to make losses in the future.

“Our losses and negative cash flows may continue in future periods, given the investments expected to be made to grow our business and logistics infrastructure, enhance our supply chain capabilities, develop and launch new solutions and service offerings, expand our customer base in existing markets , penetrate new markets and continue to innovate on our technological platform,” it said.

The startup stated that it has already spent, and expects to continue spending, significant financial and other resources on technological investments, including data science, infrastructure, and team expansion, among other initiatives.

“When we become a listed company, we will incur significant additional legal, accounting and compliance costs. “These efforts may be more costly than we expect and may not result in corresponding increased revenue or growth in our business,” it added.

As of March 31, 2024, Ecom Express’ network included 115 pick-up and processing centers, 81 sorting hubs, 32 fulfillment centers, 3,421 delivery centers, and 89 return centers.

Where Did Ecom Express Spend The Most?

In line with the revenue, total expenses increased by a marginal 0.65% to INR 2,921.5 Cr in FY24 from INR 2,902.8 Cr in FY23.

Cost of Services: Its biggest expense was the cost of services. The startup spent INR 1,389.9 Cr on this in FY24, an increase of 0.23% from INR 1,386.7 Cr in the previous year.

Losses From Damaged/ Lost Shipments: The expenses under this head shot up 9.21% to INR 92.4 Cr in FY24 from INR 84.6 Cr in FY23.

Employee Expenses: Employee benefit costs fell 9.1% to INR 603.3 Cr during the year under review from INR 664 Cr in FY23.

Earnings before interest, tax, depreciation and depreciation (EBITDA) zoomed multifold to INR 103.5 Cr in FY24 from INR 3.2 Cr in the previous fiscal year.

Ecom Express is looking to raise INR 2,600 Cr through its public issue, which will include a fresh issuance of shares worth up to INR 1,284.5 Cr and an offer for sale component of up to INR 1,315.5 Cr.

The startup also intends to raise INR 256.9 Cr through a pre-IPO placement before filing its red herring prospectus (RHP).

This is the logistics startup’s second attempt at a public listing. In 2022, the company planned an INR 4,860 Cr IPO but postponed it later due to bearish market conditions.

Ecom Express competes with the likes of Delhivery, Bluedart, Xpressbees and Shadowfax. Delhi Whilevery is listed on the bourses, Shadowfax is said to be planning an IPO of INR 2,500 – 3,000 Cr.