Logistics provider Delhivery announced on Saturday (April 5) that it is acquiring rival Ecom Express in an all-cash deal valued at up to ₹1,407 crore.

The acquisition, involving a 99.4% stake, marks one of the biggest consolidation moves in India’s fragmented logistics sector.

While positioned as a strategic move, the contours of the transaction suggest it may also be a distress sale — with SoftBank exiting yet another Indian investment at a significantly lower valuation than expected.

The board-approved transaction will see Ecom Express become a subsidiary of Delhivery within six months, subject to regulatory approvals.

Delhivery, which has maintained a stronger financial and operational footing compared to its peers, said the acquisition would help enhance cost efficiencies, improve client service, and accelerate investments in automation, robotics, drones, and electric vehicles.

However, behind the narrative of synergy lies the story of a startup that was once the poster child of e-commerce logistics — now being absorbed by its former competitor.

Founded in 2012, Ecom Express once attracted marquee investors including SoftBank, CDC Group (now British International Investment), and Partners Group.

In FY24, Ecom Express reported revenue of ₹2,607 crore, but profitability and scalability remained elusive. As competition intensified and funding dried up, the company struggled to sustain its growth.

The timing of the acquisition also raises questions. Ecom Express had been preparing for a public listing, but its IPO plans were quietly shelved after its disclosures came under scrutiny.

Delhivery had previously contested the operational and financial metrics presented by Ecom Express in its draft red herring prospectus (DRHP), alleging misrepresentation.

The fact that Delhivery is now acquiring the same company—at a time when IPO momentum has slowed and Ecom’s exit options appear limited—lends credence to the view that this is more of a rescue acquisition than a purely strategic play.

While Delhivery stands to benefit from improved route density, better asset utilisation, and greater control over e-commerce volumes, the real upside may lie in acquiring a key competitor at a steep discount.

For SoftBank, this represents yet another subdued exit in India. The Japanese investor, which acquired a significant stake in Ecom Express nearly a decade ago, is believed to have invested close to $125 million in the company. Its share in the ₹1,407 crore deal is expected to result in a loss, although the payout breakdown has not been disclosed.