The initial public offering (IPO) Western Carriers (India) opens for bidding today, that is, Friday, September 13. The logistics solutions provider is selling its shares in the range of Rs 163-172 apiece. Investors can apply for a minimum 87 equity shares and its multiples thereafter. Bidding for the issue concludes on Wednesday, September 18.
Incorporated in 2011, Western Carriers (India) is a multimodal, rail-focused, 4PL asset-light logistics company. The company offers fully customizable, multi-modal logistics solutions encompassing road, rail, water, and air transportation and a tailored range of value-added services to sectors such as metals, FMCG, pharmaceuticals, chemicals, engineering, oil and gas and retail.
Western Carriers (India) is looking to raise Rs 492.88 crore via IPO, which includes a fresh share sale of Rs 400 crore and offer-for-sale (OFS) of up to 54 lakh shares by its promoter Rajendra Sethia. The net proceeds from the issue shall be utilized towards repaying the debt, funding of capital expenditure; and general corporate purposes
Ahead of its IPO, Western Carriers (India) raised a total of Rs 147.86 crore from 15 anchor investors by allocating them 85.96 lakh equity shares. The anchor book includes names like Citigroup Global Markets, Integrated Core Strategies, Societe General, Kotak Mutual Fund (MF), Kotak Mahindra Life Insurance, Motilal Oswal MF, Nippon India MF, Aditya Birla Sun Life MF and others.
Western Carriers (Indian) provides chartering services to overseas destinations, stevedoring services at Indian ports, and coastal movement of cargo within India. It manages and handles the supply chain for increased imports, exports, and production levels for a leading metals and resource group company. The company served over 1,100 customers as of December 31, 2022.
The company's clientele includes names like Tata Steel, Hindalco Industries, Jindal Stainless, JSW Steel, Bharat Aluminium, Vedanta, Hindustan Unilever, Hindustan Coca Cola sBeverages, Tata Consumer Products, Wagh Bakri, CG Foods India, Cipla, Haldia Petrochemicals, Gujarat Heavy Chemicals, Oil and Gas, Brahmaputra Cracker and Polymer, Sheela Foam, DHL Logistics and more.
For the year ended on March 31, 2024, Western Carriers (India) reported a net profit of Rs 80.35 crore with a revenue of Rs 1,691.41 crore. The company reported a net profit of Rs 71.57 crore with a revenue of Rs 1,637.84 crore for the fiscal year 2022-23. The total market capitalization of Western Carriers (India) post-IPO shall stand at Rs 1753.63 crore.
JM Financial and Kotak Mahindra Capital Company are the book running lead managers of the Western Carriers (India) IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with Monday, September 23 as the tentative date of listing. Here's what brokerage firms said about the IPO of Western Carriers (India):
Anand Rathi ResearchRating: Subscribe Western Carriers (India) offers fully customizable, multi-modal logistics solutions encompassing road, rail, water, and air transportation and a tailored range of value-added services. Over the years, the company plans to enhance its service delivery by robust growth and operational efficiency, said Anand Rathi Research.
"At the upper price band, the company is valuing at P/E of 21.8 times with a market cap of Rs 1,753.6 crore post issue of equity shares and return on net worth of 22.4 per cent. On the valuation front, we believe that the company is fairly priced. Thus, we recommend a 'subscribe' rating to the IPO," it added.
SBI Securities Rating: Subscribe The company is valued at FY24 P/E multiple of 20.9 times/21.8 times based on the lower and upper price band respectively on the post-issue capital. The company is amongst the largest 4PL asset light logistic companies in India and is one of the few players in India with the capability to deliver cost-efficient, time-bound, customized services and solutions, said SBI Securities.
"Post repayment of debt from the proceeds of the issue the company is also likely to save on finance costs. It is set to capitalize on industry growth trends driven by healthy demand for exports and imports. The issue appears to be fairly valued when compared with close peers on most valuation and financial matrices," it said with a 'subscribe for long term' rating.
Swastika Investmart Rating: May Subscribe The company has exhibited slow but consistent financial growth with a positive trajectory. The valuation is considered reasonable. The company faces a long payment cycle and is exposed to several operational risks, said Swastika Investmart with a 'may apply' rating is recommended for long-term investors with a high-risk tolerance, citing financial challenges and market limited interest.
StoxBox Rating: Subscribe The current issue is priced at a P/E of 16.8 times on the upper band based on FY24 earnings and is relatively lower than its peers, said StoxBox. "Given its strong financials, strategic initiatives, and positioning to capitalize on the expanding rail-road multi-modal sector, we recommend a 'subscribe' rating for the issue with a medium to long-term investment perspective," it added.
Chola Securities Rating: Subscribe for listing gains Western Carriers is the largest private multi-modal, rail-focused, 4PL, asset-light logistics company in India, based on container volumes handled by private players in FY23. The company boasts a strong customer base with market leaders in the FMCG, and metals sector as clients, said Chola Securities.
"In FY24, 80 per cent of the company's revenue came from customers transacting for over three years. Western Carriers operates an asset light model, with a fixed assets to revenue from operations ratio of 16 times. The IPO appears to be reasonably priced with a post issue PER of 21.8x, below listed industry peers. We have a ‘subscribe’ rating for the IPO for listing gains," it said.
Marwadi Financial Services Rating: Subscribe Considering the FY24 EPS of Rs 7.88 on a post issue basis, the company is going to list at a P/E of 22 times with a marketcap of Rs 1,753.63 crore, whereas its peers namely Container Corporation of India and TCI Express are trading at P/E of 45 times and 36 times respectively, said Marwadi Financial Services.
"We assign 'subscribe' rating to this IPO as the company has a scaled and asset-light business model with a successful track record of delivering growth and profitability. Also, it is available at reasonable valuation as compared to its peers," it said.
Canara Bank Securities Rating: Subscribe The Ebitda margin improved to 9.01 per cent in FY24 compared to 7.40 per cent in FY22. It posted impressive RoE and RoCE figures of 20.17 per cent and 29.23 per cent in FY24, far exceeding its peers, which averaged 15 per cent and 14 per cent, respectively. Its RoCE was among the highest in the speciality logistics industry, said Canara Bank Securities.
"Its asset-light model, cost-efficient operations, and robust customer retention provide a strong foundation for growth. Valued at an attractive P/E ratio of 16.85 times and a P/B ratio of 3.4 times, compared to industry averages of 40 times and 6 times, indicates that the issue is fairly valued," it added with a 'subscribe' rating to this issue for listing gains.
KR Choksey Research Rating: Subscribe Western Carriers (India) a leading private rail-focused 4PL logistics provider, is strategically positioned to capitalize on the expanding Indian logistics market. The company’s strengths lie in its extensive pan-India network, strong client relationships, and alignment with key government initiatives like PM Gati Shakti, said KR Choksey.
"Operating under an asset-light model, it delivers multimodal logistics solutions across road, rail, water, and air transport, serving a diverse client base. With a solid financial track record, Western Carriers has achieved a 7 per cent CAGR in revenue and an 18 per cent CAGR in Ebitda from FY22 to FY24, underscoring its operational efficiency and profitability," it said with a subscribe' rating.