Ecom Express Ltd has taken a significant step towards entering the public market by filing draft documents with the Securities and Exchange Board of India (SEBI) to raise Rs 2,600 crore through an initial public offering (IPO). The proposed IPO includes a fresh issue of equity shares valued at Rs 1,284.50 crore and an Offer for Sale (OFS) worth Rs 1,315.50 crore by the company’s promoters and existing shareholders, as detailed in the draft red herring prospectus (DRHP).
The proceeds from the fresh issue are earmarked for several key investments, including Rs 387.44 crore for the establishment of new automated processing centers and fulfillment centers, Rs 73.71 crore for the procurement of computers and IT equipment, Rs 239.23 crore to enhance technology, data science capabilities, and cloud infrastructure, and Rs 87.92 crore for the repayment of existing debt.
In addition to these specific allocations, the remaining funds will be utilized for general corporate purposes and potential acquisitions, according to the draft papers submitted on Wednesday. The company is also considering a pre-IPO placement to raise Rs 257 crore, which would reduce the size of the fresh issue accordingly.
Ecom Express operates a comprehensive express logistics network across India, offering services such as first-mile pick-up, mid-mile transportation, last-mile delivery, returns management, and warehousing. By leveraging its extensive logistics infrastructure and advanced technology, the company plays a crucial role in connecting digital retailers and e-commerce platforms with consumers throughout the country.
A report by RedSeer projects robust growth for the Indian e-commerce sector, with the market expected to expand at a compound annual growth rate (CAGR) of 21% over the next five years. The market size is anticipated to grow from Rs 5.1 lakh crore in 2024 to between Rs 12.5 lakh crore and Rs 13.5 lakh crore by 2029.
This growth is particularly pronounced in Tier 2 and smaller regions, which are projected to represent 70-80% of B2C e-commerce shipments by 2029, up from 62% in 2024.
The IPO is being managed by Axis Capital Ltd, IIFL Securities Ltd, Kotak Mahindra Capital Company Ltd, and UBS Securities India Private Ltd, who are serving as the book-running lead managers for the issue.
