Logistics sector stocks bullish after infrastructure status

November 21, 2017: Investor confidence on the logistics sector reflected on the stock market after the Finance Ministry of India recognised it as a sub-sector of Infrastructure in India. Shares of companies like Aegis Logistics, VRL Logistics and Snowman Logistics gained between 1-4 percent during the early trade session on BSE Sensex. Shares of Allcargo Logistics Ltd, TCI Express Ltd and Transport Corp of India Ltd rose as much as between 3.15 percent and 4.1 percent.

In a bid to develop an integrated logistics framework within the country, the logistics sector was awarded the infrastructure status by the Indian government. This will enable companies operating cold chains, industrial parks and warehousing facilities to raise long-term credit from banks and other financial institutions at low rates, and attract foreign investment.

Logistics costs of exports are very high in the country, making Indian goods less competitive globally. “Development of logistics would give a boost to both domestic and external demand, thereby encouraging manufacturing and job creation,” read a statement issued by the Ministry of Finance.

According to a notification, logistics infrastructure includes "multimodal logistics park comprising inland container depot with a minimum investment of Rs 50 crore and minimum area of 10 acres".