Logistics firm Delhivery has alleged that its IPO-bound rival, Ecom Express, has misrepresented numbers related to the two companies’ business metrics in its draft red herring prospectus (DRHP).
These are related to metrics such as shipment volumes, Service Ebitda, and cost per shipment.
SoftBank-backed Delhivery, which is already publicly listed, said its information was incorrectly used for comparison in the DRHP.
Ecom Express said it had shipped 514.41 million shipments in FY24, while Delhivery handled 740 million packages during the same period.
However, in a filing to the stock exchanges on Friday, Delhivery alleged that this comparison was flawed. For example, Delhivery counts a shipment—even if it is not delivered to the destination and returned to origin—only as a single shipment. But the peer (Ecom Express) counts it as two shipments, as the to and fro transportation are billed separately.
Ecom Express declined to comment on the issue.
Delhivery said that the ‘Service Ebitda calculation is not like-to-like. This cannot be compared due to a lack of clarity on the consistent definition of “corporate costs”.
Delhivery also highlighted Ecom Express’ cost per shipment (CPS) calculations. It said that CPS comparison is problematic on several counts.
For instance, per shipment metrics hugely vary depending on the shipment profile—weight profile for Delhivery and peer will be significantly different due to a different client mix. It said the peer has a top customer concentration of 52 per cent of revenue (vs. 16 per cent for Delhivery), resulting in Delhivery’s average weight per parcel being about 2x that of the peer.
Shipment volume used in the denominator of the CPS calculation is not like-to-like—the peer likely double-counts RTO (Return to Origin) shipments, thereby overstating volumes and understating CPS. The peer’s CPS will increase by about Rs 7 (about 15 per cent) when adjusted for shipment volumes comparable to Delhivery.
Delhivery said Service Ebitda profit used in the numerator of the CPS calculation is not like-to-like. The definition of corporate costs is not consistent.
Ecom Express’ claim that it offers its services in 27,000 pin codes. However, Delhivery highlighted that as per the Government of India, there are 19,300 unique pin codes in the country.
Ecom Express, which is backed by Warburg Pincus, Partners Group, and British International Investment, plans to raise Rs 2,600 crore via its IPO. It filed a DRHP with the capital markets regulator Sebi on August 15.
The IPO will consist of a fresh issue of shares worth up to Rs 1,285 crore while existing investors will offload shares aggregating to Rs 1,316 crore.
First Published: Sep 13 2024 | 7:03 PM IST
