Mumbai: Home-grown private equity (PE) firm India Value Fund Advisors (IVFA)-owned logistics firm Innovative B2B Logistics Pvt. Ltd (Inlogistics) is looking to raise Rs200 crore from private equity funds, said a top executive of the PE firm.
“We are looking to raise around Rs200 crore to fund the next phase of expansion of the company. We have hired Ambit Capital to advise on the fund-raise and the process has been launched recently,” said Vishal Nevatia, founder and managing partner at IVFA.
Gurgaon-based Inlogistics operates private cargo trains and container terminals. It started operations in 2006, when the Indian Railways announced its new container train policy, wherein it allowed private operators to obtain licence to operate container trains on its network. The firm undertakes end-to-end logistics solutions, from transportation to handling, loading and unloading of various types of commodities such as steel, marble, foodgrain, apparels and electronic goods.
IVFA acquired a majority stake in the company in 2009 for around Rs200 crore.
The latest round of fund-raising will help the company to increase its network by adding more cargo rakes to its inventory and to expand the number of cargo terminals it operates, said Nevatia.
Inlogistics operates 15 container trains and a rail terminal at Jawaharlal Nehru Port Trust (JNPT), near Mumbai. It has more than 1,380 containers and has delivered over 2 million tonnes of cargo till date, according to its website.
The firm has entered into a strategic alliance with Central Warehousing Corp. (CWC), in the area of operating container trains between JNPT and Delhi-NCR, as well as operating some of CWC’s rail terminals.
Nevatia said IVFA is likely to re-invest in the company, although the majority chunk of the investment will be through new investors. IVFA has, over the years, continued to invest in the company to support its growth, he added.
Logistics has remained an attractive sector for PE investments as it is considered a proxy for overall economic growth. In the past five years, the logistics space has seen private investments worth around $1.17 billion across 74 deals, according to data from deals tracker VCCEdge.
In 2015 alone, $418 million was invested in the sector, driven primarily by the e-commerce boom.
The government has said it plans to implement the goods and services tax by 1 April 2017. The tax reform is expected to be a significant boost for the logistics industry.
In September, Mint reported that logistics company Palogix Infrastructure Pvt. Ltd is in talks with PE firms to raise up to Rs150 crore to fund its expansion and provide an exit to investor Bessemer Venture Partner.
The same month, Mint reported Bhoruka Logistics Pvt. Ltd, a Mumbai-headquartered logistics firm that operates dry and cold chain solutions on a pan-India basis, is in talks to raise Rs100 crore from PE and strategic investors.
In February, PE fund Asia Climate Partners announced it was picking up a stake in cold chain logistics firm ColdEX Logistics Pvt. Ltd. In March, Mint reported that logistics firm JM Baxi Group has started talks with PE funds to raise $150-200 million.
The last couple of years of years have also seen several logistics companies raise money through initial public offerings (IPOs).
In 2015, New Silk Route-backed VRL Logistics Ltd went public. VRL’s Rs460 crore IPO was subscribed 74 times. Also in 2015, container freight station operator Navkar Corp. Ltd raised Rs600 crore through an IPO.
In 2014, cold chain logistics firm Snowman Logistics Ltd saw its Rs197 crore IPO subscribed almost 60 times.