India's leading e-commerce logistics solutions provider EComm Express has filed draft papers for its IPO with SEBI. The company intends to raise Rs 2,600 crore through this issue. The company runs an express logistics network across India, which handles reverse logistics (returns), fulfillment services (warehousing), first-mile pickup, mid-mile transportation and last-mile delivery. PG Esmeralda and Warbug Pincus are major investors in this company.

Efforts to reduce operational costs
According to sources, Ecom Express is considering reducing operational costs with the intention of increasing its margins. For this, Ecom Express is engaged in continuous re-engineering of network design, technology initiatives, innovations in operating model and process improvements. Earlier, the company has already adopted some measures, which include -
 

• Has expanded its gig-workers platform.
• Deployed fast proprietary enterprise resource planning systems.
• Manpower costs have been reduced by increasing the share of gig workers in shipment delivery.
• Cost savings in material consumption have been improved through innovation.

Decline in shipment cost
Ecom Express' operating cost per shipment declined to Rs 39.65 in FY 2024 from Rs 45.40 in FY 2023 and Rs 47.33 in FY 2022. This is a decline of more than 16%. The company has also achieved service EBITDA of Rs 330 crore, Rs 208 crore and Rs 211 crore for FY 2024, FY 2023 and FY 2022 respectively. Apart from this, the network cost per shipment has come down by more than 37% between FY 2022 and FY 2024.

What will the company do with the funds raised?
Ecom Express will use Rs 387 crore to set up new processing and fulfillment centers with automation. It plans to exploit opportunities such as quick commerce, reverse logistics, time defined delivery, bulk shipments, fulfillment services and modular services as well as data-led value added services.

How big is the company's network?
According to RedSeer, Ecom Express covers more than 27,000 pin codes across India. It currently has the largest network with 3,421 delivery centers. The pin codes covered by Ecom Express account for about 97% of India's population. The company has handled more than 200 crore shipments since inception. In FY 2024, it has picked up shipments from more than 580,000 unique touchpoints across India.