Western Carriers To Use Rs 200 Crore From IPO Proceeds To Clear Debts

IPO-bound Western Carriers India Ltd. is planning to use up to Rs 200 crore from the total funds raised through the public issue to repay its debts, the company’s Director and Chief Executive Officer Kanishka Sethia said on Tuesday. 

The multi-modal logistics company, which primarily caters to the metal and FMCG sector, plans to raise Rs 400 crore by issuing fresh equity.

“We are looking to raise about Rs 400 crore of fresh issue, half of which will go into our debt servicing,” Sethia told NDTV Profit.

Western Carriers has over Rs 200 crore in debt, the CEO revealed.

“The current borrowings, which are mostly towards working capital, are north of Rs 200 crore. We are planning to clear out a substantial portion of it with this fund raise,” he said.

A portion of the IPO proceeds—around Rs 100 crore—will also be used to fund the company’s capex requirement.

He added that the company will make investments in 20 feet and 40 feet containers, some specialised containers, specialised container-handling equipment as well as some trailers. “That is the broad spectrum of the capex that we are looking at currently,” Sethia said.

Talking about the business model, the Western Carriers top executive said that it operates in an “asset-light model” and leases or takes assets from the market.

An asset-light business model is where the company remains less invested in its capital assets compared to operational assets. 

“The only assets we get on our books are the critical ones that we need to run our supply chain, for example critical components like container reach stackers or specially designed equipment,” Sethia noted.

“Asset-light model helps us be very flexible and upscaling or downscaling on the basis of our customers’ needs. Our focus remains on solving the customer supply chain problems,” he added.

Western Carriers' IPO will open for subscription on Sept. 13 and end on Sept. 18.

The initial share sale consists of a fresh issue of 2.33 crore shares, worth Rs 400 crore, and an offer-for-sale component of 54 lakh shares, amounting to Rs 92.9 crore. The price band of the IPO has been set between Rs 163 and Rs 172 per equity share.

The Rs 492.88-crore book-built issue of Western Carriers is scheduled to debut on Sept. 23 on both, the NSE and the BSE.