Delhivery accuses Ecom Express of misrepresenting business metrics in their IPO prospectus, igniting a fierce rivalry in logistics.

Delhivery, a logistics company backed by SoftBank, has accused its competitor Ecom Express of wrongly representing business metrics in its draft IPO documents. The dispute centers on shipment volumes and other financial figures, with Delhivery claiming Ecom Express has misclassified shipments by double-counting some returns. For instance, while Ecom Express reported 514.41 million shipments, Delhivery handled 740 million, arguing that their comparison is misleading. Delhivery also challenged Ecom Express on their cost per shipment calculations and definitions of corporate costs. Despite these allegations, Ecom Express has not commented publicly. The IPO aims to raise Rs 2,600 crore, with a mix of new and existing shares being offered.

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Logistics firms Delhivery and Ecom Express are currently in the spotlight over claims of misrepresentation in their business metrics. Delhivery, which is already publicly listed and backed by SoftBank, asserts that Ecom Express has inaccurately presented key numbers in its draft red herring prospectus (DRHP) as it prepares for an initial public offering (IPO).

According to Delhivery, the metrics in question include shipment volumes and cost per shipment. Ecom Express reported handling 514.41 million shipments in the fiscal year 2024, while Delhivery claimed to have dealt with 740 million packages. However, Delhivery argued that the basis of comparison is flawed. For instance, Delhivery counts a shipment as one unit even if it is returned to the sender, while Ecom Express counts it twice due to its billing structure.

Moreover, Delhivery questioned Ecom Express’s calculation methods for Service Ebitda and cost per shipment, stating that the definitions used are inconsistent. Delhivery pointed out that the average weight of parcels differed significantly between the two companies due to their respective client mixes, which impacts the per-shipment metrics.

Ecom Express has claimed to provide services in 27,000 unique pin codes, but Delhivery noted that official government data lists only 19,300 unique pin codes in India. Ecom Express aims to raise approximately Rs 2,600 crore through its IPO, with a combination of fresh shares and a sell-off by existing investors.

While both companies continue to navigate this dispute, the scrutiny over their presented data raises vital questions about transparency and accuracy in the logistics industry, particularly as they gear up for significant financial milestones.

Tags: Delhivery, Ecom Express, logistics industry, IPO, business metrics, shipment volumes, Service Ebitda, cost per shipment.

1. What does IPO-bound mean for Ecom Express?
   IPO-bound means that Ecom Express is planning to go public and offer its shares to investors for the first time.

2. What is DRHP?
   DRHP stands for Draft Red Herring Prospectus. It is a document that companies must file when they plan to go public, giving details about their business and finances.

3. What went wrong with the numbers in the DRHP?
   Ecom Express used incorrect financial numbers in their DRHP, which can create confusion for potential investors about the company’s performance.

4. How does this mistake affect Ecom Express?
   This mistake may raise concerns among investors and could delay the company’s IPO process while they correct the numbers.

5. What should Ecom Express do next?
   Ecom Express needs to correct the numbers in the DRHP and refile the document to ensure that investors have accurate information before the IPO.