Mahindra Logistics to raise Rs 829 cr from IPO

The third party logistics service provider Mahindra Logistics is planning to raise around Rs 829.35 crore at the upper end of the price band from its initial price offering (IPO). The company has set a price band of Rs 425-429 per share for its IPO. The IPO is scheduled to open on October 31 and close on November 2. The minimum bid lot for the offer is fixed at 34 equity shares and in multiples of 34 shares thereafter.The company has proposed an offer for sale (OFS) up to 1.93 crore equity shares of face value of Rs 10 each. The IPO comprises of an OFS up to 96.66 lakh shares by promoter selling share holder Mahindra & Mahindra (M&M), 92.71 lakh shares by Normandy Holdings and up to 3.95 lakh equity shares by Kedaara Capital Alternative Investment Fund (AIF). Also, the offer includes a reservation of up to 1.25 lakh equity shares for subscription by eligible employees with a discount of Rs 42 per share.

Pirojshaw Sarkari, chief executive officer, Mahindra Logistics said, “Supply chain management (SCM) and corporate people transport solutions (PTS) business contributed 89.89 % and 10.11%, respectively, to the total revenue from operations in the threemonth period ended June 2017.”The company believes that its competitive advantage is its “asset-light” business model pursuant to which assets such as vehicles and warehouses are owned or provided by business partners. Pirojshaw said that one of the enablers for logistics is the introduction goods and service tax (GST). “The logistics spend in India is 13% of the GDP. Third party logistics is only 5% of the entire logistics size and that translates into Rs 300 billion and is stated to grow to Rs 500 billion with a CAGR of 20% by 2020,” Pirojshaw said.

Through its SCM business, the company offers customized and end-to-end logistics solutions and services including transportation and distribution, warehousing, in-factory logistics and value-added services. Through its PTS business, the company provides technology-enabled people transportation solutions and services across India to IT, ITeS, business process outsourcing, financial services, consulting and manufacturing industries.

Mahindra India