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Anand Rathi Report
Western Carriers India Ltd. will launch its initial public offering on Sept. 13 and will conclude on Sept. 18. The Kolkata-based multi-modal, rail-focused, 4PL asset-light logistics company has set the price band in the range of Rs 163-172 per share. The minimum order lot for bidding is 66.
The Rs 492.9 crore IPO consists of a fresh issue of Rs 400 crore and an offer for sale of shares worth Rs 92.9 crore.
Objects of fresh Issue
Prepayment or scheduled re-payment of a portion of certain outstanding borrowings availed by the company.
Funding of capital expenditure requirements towards purchase of commercial vehicles; 40 feet specialized containers and 20 feet normal shipping containers; and reach stackers.
General corporate purposes
Strengths
Comprehensive and integrated multi-modal, end-to-end logistics solutions
Strategically positioned to capitalise on a fast-growing logistics market in India
Experience in delivering customised, end-to-end services and executing complex and customised projects
Strong customer relationships with a diverse customer base
Key Strategies:
To Pursue inorganic growth on an opportunistic basis
Continue to invest in infrastructure capabilities
Acquire new customers and expand into new sectors and new geographies
Strong relationships with the existing customers
Key Risks
The company relies on a few key customers, especially in metals and FMCG. Any decline in revenue from these customers could severely impact its business and financial health.
The business needs substantial working capital. Delays in customer payments or tighter payment terms from suppliers could strain cash flows.
It relies heavily on technology. Any system disruptions or security breaches could lead to financial losses and damage its reputation.
Western Carriers has unsecured loans that can be recalled at any time. If recalled, the company might not have enough funds to repay, affecting financial stability.
The company’s logistics operations depend on external infrastructure like roads and ports. Any disruptions could harm its business operations.
Valuation
Western Carriers is a Multi-modal, rail-focused, 4PL asset-light logistics company. The company offers fully customizable, multimodal 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.
At the upper price band company is valuing at P/E of 21.8x with a market cap of Rs 1754 crore post issue of equity shares and return on net worth of 22.4%.
On the valuation front, we believe that the company is fairly priced. Thus, we recommend a “Subscribe” rating to the IPO
Click on the attachment to read the full IPO report:
Also Read: Western Carriers IPO: All You Need To Know
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