India: Mahindra Logistics seeks $460m valuation in IPO

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Mahindra Logistics Ltd, the logistics arm of automobile maker Mahindra and Mahindra Ltd, on Tuesday said its Rs829.36 crore initial public offering (IPO) will open on 31 October.

The logistics company has set a price range of Rs425-429 per share for the IPO, which values it at Rs3,023-3,052 crore. The offer will close on 2 November.

The share sale is a pure secondary offering, which will see parent Mahindra, Normandy Holdings Ltd and private equity firm Kedaara Capital collectively sell 19.33 million shares. The offer will see a total stake dilution of 27%.

Mahindra Logistics provides services such as warehousing, transport, in-factory logistics, people logistics and freight forwarding for clients across industries such as auto and auto component manufacturing, consumer, pharmaceuticals and e-commerce.

In 2016-17, the company reported a revenue of Rs2,676.2 crore, up 28% from the previous fiscal. The company reported a profit of Rs46 crore in 2016-17, up 28% from a year earlier.

According to Pirojshaw Sarkari, chief executive of Mahindra Logistics, the company intends to continue to focus on growing business from non-Mahindra Group clients. The revenue derived from non-Mahindra Group clients increased to 46.04% of the total in fiscal 2017 from 29.86% in fiscal 2015.

Mahindra Logistics operates in two distinct business segments, namely supply chain management (SCM) and corporate people transport solutions (PTS). In fiscal 2017, the SCM and PTS businesses accounted for 88.94% and 11.06%, respectively, of the total revenues.

Kedaara Capital bought a 23% stake in Mahindra Logistics for Rs200 crore in 2014.

The Indian logistics industry comprising segments such as road freight, rail freight, coastal freight, warehousing, cold chain and container freight stations and inland container depots, estimated at Rs6.4 trillion in fiscal 2017, is expected to grow at a compound annual growth rate of 13% to Rs9.2 trillion by fiscal 2020, according to a report by rating agency Crisil Ltd.

Mahindra Logistics has appointed Kotak Mahindra Capital Co. Ltd and Axis Capital to manage the share sale.

Till September this year, the Indian primary market has witnessed 24 IPOs with companies raising Rs30,853 crore, according to data from primary market tracker Prime Database. In 2016, 26 companies raised Rs26,493.8 crore through the IPO route.

This article was first published on LiveMint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.