To tap the buoyant Indian primary market, a leading player from India’s logistics industry – Western Carriers (India) Ltd – is set to launch its initial public offer (IPO) on Friday, September 13, 2024.
The company which has over two decades of experience is looking to raise nearly ₹493 crore via the initial share sale which will close for subscription on September 18. It will be the fifth mainboard IPO to open this week. The IPO is a mix of a fresh issue of ₹400 crore and an offer for sale (OFS) worth ₹92.88 crore. It is priced in the range of ₹163-172 per share.
Here are the key details of Western Carriers (India) IPO:
| IPO Date | 13 Sept - 18 Sept |
| Price Band | ₹163 to ₹172 per share |
| Issue Size | 28,655,813 shares (Up to ₹492.88 crore) |
| OFS Size | ₹92.88 crore |
| Lot Size | 87 shares |
| Listing At | BSE, NSE |
| Tentative Listing Date | 23 Sept |
IPO Objective: The funds raised via the fresh share sale will be utilised as follows:
- ₹200.23 crore for prepayment or repayment of a portion of certain outstanding
borrowings availed by the company
- ₹186.1 crore for funding capital expenditure towards the purchase of commercial vehicles, 40 feet specialised containers and 20 feet normal shipping containers and reach stackers
- The remaining amount for general corporate purposes
About Western Carriers (India)
Incorporated in 2011, Western Carriers (India) is a 4PL logistics company, specialising in multi-modal transportation with a focus on rail. It provides customised logistics solutions across road, rail, water, and air, along with a variety of value-added services like product packaging, cargo handling, customs clearance, inventory management and warehouse planning among others.
As per the company’s RHP, it was the largest private player in its category in fiscal 2022 in terms of container volumes. With a strong footprint in both domestic and EXIM (Export-Import) markets, the company secured a market share of 7% and 3%, respectively, for container volumes handled in the same fiscal.
As of December 2022, it had 1,100-plus customers, spread across various industries, including metals, FMCG, pharmaceuticals, chemicals, engineering, oil and gas, and retail.
Some of its key customers include Tata Steel, Hindalco, Jindal Stainless, JSW Steel, BALCO, Vedanta, Hindustan Unilever, Coca-Cola India, Tata Consumer Products, Wagh Bakri, CG Foods, Cipla, MCPI, Haldia Petrochemicals, GHCL, BCPL, Sleepwell, and DHL Logistics.
Over the years, the company has earned recognition from its key clients like Tata Steel, Hindalco, and BALCO for its quality service and comprehensive logistic solutions. Tata Steel honoured it for exceptional support in new trials. In 2021, BALCO awarded the company the ‘CEO Award’ for being their ‘Best Business Partner,’ and in 2022, Hindalco presented it with an appreciation award for outstanding service and timely delivery in Belagavi.
In 2020, the company achieved a turnover of approximately ₹1,000 crore for the first time. Here’s a look at its financial performance over the last fiscal year.
| Parameter | FY 24 | FY 23 | Growth (%) |
| Revenue (in ₹ crore) | 1,691.41 | 1,637.84 | 3.27% |
| PAT (₹ in ₹ crore) | 80.35 | 71.57 | 12.27% |
Source: Western Carriers (India) RHP
Strengths & Risks of Western Carrier (India) IPO
Strengths
- The company has a diverse customer base spread across various industries, and long-standing relationships, suggesting trustworthiness and reliability in service delivery. In fiscal 2022, 80% of the company’s revenue came from customers who have been with them for over three years.
- The company has experience in delivering customised, end-to-end services and executing complex and bespoke projects. This helps create high entry barriers, giving the company a competitive advantage.
- The company is strategically positioned to take advantage of the rapidly expanding logistics market in India, driven by increased exports and imports, rising domestic manufacturing, growth in e-commerce, and supportive government policies.
Risks
- The company faces concentration risk as the top five customers contributed 57% to the overall revenue as of fiscal 2024. Failure to retain these customers could materially impact the financial performance of the company.
| Particulars | % of revenue from operations |
| Largest customer | 16.47 |
| Top 5 customers | 57.07 |
| Top 10 customers | 71.97 |
Source: Western Carriers (India) RHP
- Delays in payments from customers or stricter payment terms from third-party service providers could hurt cash flow. This might lead to high working capital needs, which if not met could seriously impact business, cash flow, and overall financial health.
- The company’s business depends on smooth logistics infrastructure like roads and railways, and any disruptions can significantly impact operations and reputation. Issues such as congestion in transportation networks, regulatory actions, or adverse weather conditions could affect our services and growth.
How to Apply For Western Carriers (India) IPO?
To apply for the Western Carriers (India) IPO via INDmoney, follow these steps:
- Download the INDmoney app and create a free account by completing the KYC process.
- Click on the INDstocks tab, followed by IPOs.
- In the 'Explore IPOs' section, find 'Live IPOs’.
- Click 'Apply' to view the key details of the IPO.
- Choose the number of lots you wish to apply for and continue with the application.
- Place your order via UPI. The funds for your IPO application will be held in your bank account until the shares are allocated.
Conclusion
Western Carriers (India) IPO comes with both potential benefits and risks. You can also study the company’s RHP for a better and more detailed understanding of the company’s business. It is also important to understand your financial objectives and risk tolerance before investing.