Mahindra Logistics to go public, to raise Rs 829 crore through listing

October 25, 2017: One more Indian logistics company is hitting the equity markets. This time it is Mahindra Logistics, an asset-light company as described by the management, will open its initial public offering (IPO) on October 31, 2017. The IPO will close on November 2, 2017.  And the company has fixed the price band between Rs 425 and Rs 429 per equity share with a face value of Rs 10.

The offer includes a discount of Rs 42 per equity on the offer price to the eligible employees. Bids can be made for a minimum of 34 equity shares and in the multiples of 34 thereafter.

At the upper limit of the price band, the company would raise Rs 829 crore. Currently, Mahindra and Mahindra (M&M) holds​ 72 percent, private equity fund Kedaara Capital Alternative Investment Fund owns 22.9 percent and the rest 5 percent is with the employees.

Post the listing 27 percent will be with the public wherein M&M holding will come down to 61 percent, Kedaara will be 9.5 percent followed by 3 percent with the employees.

The lead managers for the issue are Kotak Mahindra Capital Company Ltd and Axis Capital Ltd.

Mahindra Logistics took shape in the year 2000. From 2000 to 2008, the company handled the inbound and outbound logistics of M&M. And in the financial year, 2009 Mahindra Logistics took the shape of a 3PL company. In the year 2014, private equity fund Kedaara came into the picture. In 2015, Mahindra Logistics acquired Lords Freight and also formed the 2x2 Logistics.

“We are a Rs 26 billion company as of FY 2017. 46 percent of the revenue came from non-Mahindra logistics segment. We grew at a CAGR of 65 percent in this segment over the last four years,” said Pirojshaw Sarkari, CEO, Mahindra Logistics.

“The changes that the GST has brought in will see the emergence of large size (A- grade) warehouses in the country. When I say large, this would be of minimum 4 to 5 lakh sq mts in size,” he added.

Logistics spent in India is 13 percent of the GDP. The size of the logistics market is Rs 6.4 trillion in 2017, which is expected to be Rs 9.2 trillion by 2020. 3PL constitutes only 5 percent of the entire logistics segment. It is expected to register a CAGR of 13 percent over the next three years.