| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 163 to ₹ 172 | 87 | 13th Sep, 2024 – 18th Sep, 2024 | ₹492.88 Cr |
About Western Carriers (India) Ltd IPO
Western Carriers (India) Limited is the leading private, multi-modal, rail-focused 4PL logistics provider in India based on container volumes handled in FY23, with a 6% domestic and 2% EXIM market share. Leveraging a scalable, asset-light business model, it offers tailored 3PL and 4PL solutions, addressing complex logistics needs through integrated, end-to-end services across road, rail, sea, and air transport. Established in 1972 and acquired by the current company in 2013, the business has evolved over five decades to provide comprehensive multi-modal logistics solutions, including inventory management, warehousing, and customs clearance. The firm has longstanding relationships with key clients in sectors such as metals, FMCG, pharmaceuticals, and oil and gas, with 80% of its FY24 revenue coming from customers with over three years of engagement and a 100% retention rate for its top ten clients. Recognized for its quality and efficiency, the company has received multiple awards, including Tata Steel’s “Support for New Trials” and BALCO’s “Best Business Partner” award. Looking ahead, the company aims to enhance its service offerings, expand into new geographies, and increase operating margins by improving operational efficiencies and leveraging its expertise to attract new business. It plans to use funds from its public offering to acquire commercial vehicles and specialized containers, further strengthening its capabilities and service quality.
Objective of the Western Carriers (India) Ltd IPO
The company proposes to utilize the net proceeds towards the funding of the following objects:
- Prepayment or scheduled repayment of a portion of certain outstanding borrowings availed by the company;
- Funding capital expenditure requirements of the company towards purchase of:
- commercial vehicles;
- 40 feet specialized containers and 20 feet normal shipping containers; and
- reach stackers; and
- General corporate purposes.
Rationale To Invest In Western Carriers (India) Ltd IPO
Leading the charge in customized, end-to-end logistics solutions
The company excels in providing customized, end-to-end logistics solutions across India, leveraging a robust mix of rail, road, sea, and air transport to deliver cost-efficient and timely services. Its asset-light approach, extensive service portfolio, and advanced technological capabilities position it uniquely in a rapidly growing market. With significant expertise in managing large-scale, complex logistics projects and a track record of timely, cost-effective delivery, the company is poised to capitalize on the burgeoning demand for multi-modal logistics solutions. The Indian logistics sector, supported by government initiatives like the PM Gati Shakti National Master Plan and anticipated market growth, provides a fertile environment for expansion. The company’s ability to offer tailored solutions, coupled with a strong operational track record and high customer satisfaction, creates substantial entry barriers and drives repeat business. Recognized for its exceptional service and innovation, the company is strategically positioned to leverage the projected growth in the rail-road multi-modal sector and overall logistics market, making it a compelling investment opportunity.
Robust customer relationships and strong financial performance
The company excels in maintaining strong, long-term relationships with a diverse customer base, serving 1,647 clients across various industries, including metals, FMCG and pharmaceuticals. This broad client base, combined with a high revenue contribution from top customers, underscores its role as a trusted logistics partner. The company’s revenue from its top 10 customers has consistently been a significant portion of its total revenue, demonstrating customer loyalty and stability. Its ability to deliver tailored, end-to-end logistics solutions, especially in complex projects, enhances its market position. Financially, the company shows strong growth with a steady increase in revenue, EBITDA, and profit over recent years, indicating robust operational efficiency and profitability. The asset-light model supports scalability and flexibility, with low lease costs relative to operating expenses. With low leverage and a solid balance sheet, the company is well-positioned for future growth and expansion. Overall, its proven track record, effective customer engagement, and sound financial health makes it an attractive investment opportunity in the logistics sector .
Valuation of Western Carriers (India) Ltd IPO
The company, a dominant player in India’s logistics sector, excels in delivering comprehensive, multi-modal solutions across rail, road, sea, and air transport. Leveraging an asset-light model, it integrates services such as warehousing, customs clearance, and cargo handling, serving a broad client base of 1,647, with 71.97% of revenue concentrated among its top 10 customers. However, the company faces risks from high customer concentration, which it plans to address by diversifying into new sectors and strengthening customer relationships. Financially, it has shown robust growth, with revenue rising from Rs. 14,708.8 million in FY22 to Rs. 16,857.7 million in FY24, and EBITDA increasing significantly from Rs. 1,088.9 million to Rs. 1,518.2 million. The EBITDA margin improved from 7.4% in FY22 to 9.0% in FY24. Additionally, the company maintained a strong balance sheet, with total equity rising to Rs. 3,983.6 million and a Net Debt to EBITDA of 1.52x in FY24. The company further plans to improve operational margins through value-added services and technology, underscoring its potential for sustained growth. Its commitment to leveraging technological advancements and expanding project logistics capabilities position it well to capitalize on the projected growth in the rail-road multi-modal sector, forecast to reach Rs. 4,667 billion by FY29. The current issue is priced at a P/E of 16.8x on the upper band based on FY24 earnings and is relatively lower than its peers. 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.
What is the Western Carriers (India) Ltd IPO?
Western Carriers (India) IPO is a book built issue of Rs 492.88 crores. The issue is a combination of fresh issue of 2.33 crore shares aggregating to Rs 400.00 crores and offer for sale of 0.54 crore shares aggregating to Rs 92.88 crores. Login to your account now – https://campaign.StoxBox.in/redirect.html
How to apply for the Western Carriers (India) Ltd IPO through StoxBox?
To apply for the Western Carriers (India) Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Western Carriers (India) Ltd IPO open?
Western Carriers (India) Ltd IPO is opening on 13th September 2024. Apply Now
What is the lot size of the Western Carriers (India) Ltd IPO?
The Lot Size of Western Carriers (India) Ltd IPO is 87 equity shares. Login to your account now – https://campaign.StoxBox.in/redirect.html
When is the Western Carriers (India) Ltd IPO allotment date?
The allotment Date for Western Carriers (India) Ltd IPO is 19th September 2024. Login to your account now – https://campaign.StoxBox.in/redirect.html
When is the Western Carriers (India) Ltd IPO listing date?
The listing Date for Western Carriers (India) Ltd IPO is 23rd September 2024. Login to your account now – https://campaign.StoxBox.in/redirect.html
What is the minimum investment required for the Western Carriers (India) Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,964. Login to your account now – https://campaign.StoxBox.in/redirect.html
What is the maximum investment allowed for the Western Carriers (India) Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 194,532. Login to your account now – https://campaign.StoxBox.in/redirect.html
What are the risks associated with investing in the Western Carriers (India) Ltd IPO?
- High customer concentration risk: The company faces a high risk of customer concentration, with a significant portion of its revenue dependent on a few key clients, particularly in the metals and FMCG sectors. In FY24, the top 10 customers contributed 72.0% of revenue, underscoring the company’s reliance on these industries. Fluctuations in these sectors or loss of these clients could adversely impact the company’s financial performance and stability.
- Working capital and credit risk exposure: The company faces significant working capital challenges due to delays in payments from customers and tighter credit terms from third-party service providers. The trade receivables days increased from 77 in FY22 to 114 in FY24, while trade payables days decreased from 19 to 14 over the same period. High outstanding receivables and reduced credit periods from vendors may strain cash flows, impacting the company’s financial stability.
- Legal proceedings and their potential impact: The company, its directors, and promoters are involved in various legal proceedings, including criminal, tax, and regulatory cases. These proceedings involve significant amounts aggregating to Rs. 30.9 million with potential risk of diverting management’s focus and resources, which may negatively impact the company’s reputation, financial condition, and operations. Notably, a criminal case against promoter Kanishka Sethia remains unresolved. Adverse outcomes in these proceedings could materially affect the company’s overall financial health.
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When will the Western Carriers (India) Ltd IPO shares be credited to my Demat account?
The Western Carriers (India) Ltd IPO be credited to the account on allotment date which is 20th September 2024. Login to your account now – https://campaign.StoxBox.in/redirect.html
Where can I find the Western Carriers (India) Ltd IPO prospectus?
The prospectus of Western Carriers (India) Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Western Carriers (India) Ltd IPO?
| IPO Open Date | Friday, September 13, 2024 |
| IPO Close Date | Wednesday, September 18, 2024 |
| Basis of Allotment | Thursday, September 19, 2024 |
| Initiation of Refunds | Friday, September 20, 2024 |
| Credit of Shares to Demat | Friday, September 20, 2024 |
| Listing Date | Monday, September 23, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on September 18, 2024 |
