Western Carriers India IPO: The initial public offering of logistics company Western Carriers (India) Ltd, which opened for public subscription on Friday, witnessed the second day of bidding on Monday. The price band for the Rs 492.88 crore IPO has been fixed at Rs 163 to Rs 172 per share for the public issue. On the second day of bidding on Monday, the IPO got 5.09 times subscription and bids were received for 10,21,57,923 shares as against 2,00,59,070 shares.
The non-institutional investors category was subscribed 5.61 times, while the one for retail individual investors (RIIs) was subscribed 7.77 times. The QIB category was subscribed 1 per cent.
Western Carriers (India) is the largest private, multi-modal, rail-focused, 4PL asset-light logistics company in India in terms of container volumes handled by private players in FY23.
Western Carriers India IPO: Key Dates
The IPO will be open for public subscription between September 13 and September 18. The share allotment of Western Carriers India IPO will likely be finalised on September 19, while its shares will be listed on both BSE and NSE on September 23.
Western Carriers India IPO: Price Band
The price range of the much-awaited IPO of Rs 492.88 crore has been fixed at Rs 163 to Rs 172 per share.
Western Carriers India IPO: GMP Today
According to market observers, unlisted shares of Western Carriers India Ltd are trading at Rs 62 higher than its issue price in the grey market. The grey market premium or GMP of Rs 62 means that the grey market expects a 36.05 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
The 'grey market premium' reflects the willingness of investors to pay more than the issue price.
Western Carriers India IPO: Analysts Recommendations
Recommending 'subscribe' to the IPO, brokerage firm Anand Rathi said, 'The company plans to enhance its service delivery in the coming years.
Strong growth and operational efficiency. The company is valued at a P/E of 21.8x at the upper price band, with a market capitalisation of Rs 17,536 million after the issuance of equity shares and a return on net worth of 22.4 per cent. On the valuation front, we believe the company is fairly valued. Hence, we recommend a 'Subscribe' rating to the IPO.”
It said Western Carriers India intends to enhance the scope of its engagement with existing customers by strengthening existing service offerings, adding new offerings, serving new geographies, providing additional value-added services and providing time and cost saving solutions to customers. In addition, the company will continue to expand operational capabilities and expand network infrastructure and capacity, to help the company improve quality metrics and overall performance.
Another brokerage house Swastika Investmart has given a 'may be implemented' rating to the IPO.
“Western Carriers (India) has demonstrated slow but consistent financial growth with a positive trajectory. The IPO valuation is considered reasonable. The company faces a long payment cycle and is exposed to several operational risks. Given the company's financial challenges and limited market interest, a 'may apply' rating is recommended for long-term investors with a high risk tolerance,” Swastika said.
Aakriti Mehrotra, Research Analyst at Stoxbox, also recommended 'Subscribe', she said, “The current issue is priced at a PE of 16.8x at the upper band based on FY24 earnings and is relatively lower than its peers. Given its strong financial position, strategic initiatives and position to capitalise on the expanding rail-road multi-modal sector, we recommend a 'Subscribe' rating for the issue with a medium to long-term investment perspective.”
Western Carriers India IPO: Anchor Investment
Western Carriers (India) on Thursday raised Rs 148 crore from anchor investors, a day before its initial share sale opened for public subscription.
Aditya Birla Sun Life Insurance Company, Kotak Mahindra Life Insurance Company, Motilal Oswal Mutual Fund (MF), Kotak MF, Aditya Birla Sun Life MF, Nippon India MF, BNP Paribas, Societe Generale and Citigroup Global Markets Mauritius are among the anchor investors.
According to the circular uploaded on the BSE website, the company has allotted 85.97 lakh equity shares to 15 funds at Rs 172 per share, which is also the upper end of the price band, taking the total transaction size to Rs 148 crore.
Western Carriers India IPO: More Details
The Rs 493-crore initial public offering (IPO) of the Kolkata-based company will be available for public subscription from September 13 to September 18 in the price range of Rs 163 to Rs 172 per share.
The IPO comprises issuance of fresh equity shares aggregating to Rs 400 crore and an offer for sale (OFS) of 54 lakh equity shares worth Rs 93 crore at the upper end of the price band by promoter Rajendra Sethia.
Rs 163.5 crore of the fresh issue proceeds will be used for debt repayment, Rs 152 crore for funding capital expenditure requirements for purchase of commercial vehicles, shipping containers and reach stackers and the balance will be used for general corporate purposes.
Investors can bid for a minimum of 87 equity shares and in multiples thereof, the company said.
Western Carriers is India's leading private, multi-modal, rail-focused, asset-light logistics company with a customer base of 1,647 across various sectors such as metals & mining, FMCG, pharmaceutical, building materials, chemicals, oil & gas, and utilities as of March 2024.
Some of its major clients include Tata Steel, Hindalco Industries, Vedanta, Balco, HUL, Coca-Cola India, Tata Consumer Products, Wagh Bakri, Cipla, Haldia Petrochemicals and Gujarat Heavy Chemicals, etc.
As of FY24, the company's operating revenue was Rs 1,685 crore, with a profit after tax (PAT) of Rs 80 crore.
JM Financial and Kotak Mahindra Capital Company are the book-running lead managers to the issue. The equity shares are proposed to be listed on BSE and NSE.