Ecom Express Faces Concentration Risk Ahead of $310 Million IPO

• Ecom Express has filed for a $310 million IPO, with a primary raise of $153 million and an offer of sale by existing investors worth $157 million.
• The company’s revenue growth has slowed, with a 2% increase in FY24, and a significant net loss of $30.5 million, indicating margin pressure.
• A single client accounted for 52% of Ecom Express' revenues in FY24, raising concerns about concentration risk compared to competitors like Delhivery.
• The logistics sector is seeing a rise in captive logistics players, with Meesho’s Valmo contributing to a shift away from third-party providers.
• Major investors Partners Group and Warburg Pincus will be classified as promoters in the IPO, holding 49.8% and 27% stakes respectively.

Source: The Arc