Delhivery Share Price Bucks Trend Amid Monday Blues On Ecom Express Acquisition

Shares of logistics company Delhivery Ltd. rose over 2% on Monday in contrast to a crashing market. This comes after the company announced that it will acquire rival firm Ecom Express Ltd. for Rs 1,407 crore.

The acquisition is to be completed within six months from the date of execution of the share purchase agreement, the company said in an exchange filing. The logistics solutions company will acquire shares equivalent to at least 99.4% of the issued share capital of Ecom Express.

"This acquisition aims to enhance Delhivery's scale, thereby strengthening its value proposition to clients," the company said in an exchange filing on Saturday. The company expects to use revenue from the increased scale to invest in improving service quality through network expansion and network quality improvements, technology investments and research development.

The company further expects the acquisition to "foster growth within the vendor ecosystem." It also added that the existing vendors may gain further confidence to invest in assets and research, which will further benefit the logistic industry.

Delhivery Share Price Rises

Shares of Delhivery fell as much as 7.84% to Rs 238.50 apiece, but later it rose 2.26% on Monday. It pared gains to trade 1.33% higher at Rs 262.25 apiece, as of 11:04 a.m. This compares to a 4% decline in the NSE Nifty 50.

The stock has fallen 43.46% in the last 12 months and 24.25% year-to-date. Total traded volume so far in the day stood at 8.9 times its 30-day average. The relative strength index was at 50.

Out of 24 analysts tracking the company, 18 maintain a 'buy' rating and six suggest 'hold', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 51.1%.