Delhivery completes largest logistics integration in India with Spoton; stock climbs ~2%

27 Jul 2022 , 12:38 PM

In August 2021, Delhivery Limited acquired Spoton with the goal of strengthening its position in the Express Part Truckload market.

Following the integration of the two companies’ systems and organizations, in April 2022, it initiated infrastructure, network, and operations integration to fully combine into a single network.

The company stated that this communication is intended to provide an update on the integration’s status and the next steps.

The overall integration process necessitated the integration of 2,000+ Spoton team members, 5,500+ customers, and a 2.5M sq ft infrastructure spread across 350 operating facilities.

Post-acquisition, the integration was split into three phases starting with Integration of clients and teams, Integration of systems (technology), and Integration of operations.

Phases I and II were finished on time in March 2022. In Q1, it began the final phase, full infrastructure, network, and operations integration.

Company’s decision to complete this critical final phase in Q1 was based on business cyclicality (Q1 typically has lower volumes than Q2-Q4) and is in line with the company’s annual CAPEX cycle (it typically commissions new infrastructure in Q2).

The company outlined that its operational integration phase took longer than expected to stabilize.

The Spoton acquisition will provide the company with operating scale in its integrated business and larger network effects, improving transit times in its mesh network and lowering total operating costs. In addition, it will allow Delhivery to enter a new market segment, economy PTL, in FY23.

At around 12.41 PM, Delhivery was trading at Rs632.10, up by 1.56% against previous close of Rs622.40 on NSE. So far, it touched intraday high and low of Rs632.95 and Rs605.55 respectively.