Western Carriers (India) Ltd IPO 

Last Updated on October 6, 2023 by BFSLTeam BFSLTeam

Western Carriers (India) Ltd is the largest multi-modal, asset-light rail logistics company in India. In June 2022, the company filed its Draft Red Herring Prospectus with the Securities and Exchange Board of India (SEBI). It aims to raise funds through an IPO to repay debts and use the rest for capital expenditure and other corporate purposes.

SEBI gave its nod for the launch of this IPO and provided an observation letter for the same in September 2023. The company will likely announce its IPO date after consultation with its merchant bank partners. 

Interested in this upcoming IPO? Here are all the essential details. 

About Company 

Western Carriers (India) Ltd is the leading private, multimodal, asset-light fourth-party rail logistics company in India. The company’s export-import and domestic market share was 3% and 7%, respectively, in FY22. 

The logistics company has more than 5 decades of experience in multi-modal shipments via road, rail, and sea for export-import and domestic cargo in India. Rajendra Sethia, the promoter, started his rail-focused logistics firm in 1972. Later, in 2013, it was merged with Western Carriers.

The company operates in various sectors such as metals, chemicals, pharmaceuticals, FMCG, oil and gas, utilities and others. Some of its prominent clients include Tata Steel Limited, JSW Steel Coated Products Limited, Bharat Aluminium Company Limited, Hindustan Unilever Limited, Cipla Limited, Haldia Petrochemicals Limited, Brahmaputra Cracker and Polymer Limited, DHL Logistics Private Limited, and more. 

Western Carriers (India) IPO Details

This IPO will consist of both a fresh issue and an Offer for Sale. Its existing promoter Rajendra Sethia will offer 9,328,995 equity shares via an OFS and there will be a fresh issue worth Rs. 500 crore. 

Around Rs. 200 crore of the funds acquired from Western Carriers (India) Ltd IPO will go towards prepayments and repayments of certain loans taken by the company. Western Carriers also plans to invest in commercial vehicles, 20 ft. normal shipping containers, 40 ft. specialised shipping containers, and reachstackers. 

The remaining funds will be used for general corporate reasons. For its OFS, the promoter will get the entire proceeds after bearing all related costs except listing fees. 

Western Carriers (India) Ltd IPO date is yet to be announced. Details of the price band and minimum lot size are also not known.

Company Financials

The table below includes some crucial financial details of the logistics company as per its DRHP. Potential investors can refer to this table for information:

Parameters as Per the Year Ending On	March 31 2022	March 31 2021	March 31 2020
Total Assets	4,903.29	4,252.15	3,585.23
Total Liabilities	2,327.47	2,285.69	2,064.89
Total Expenses	13,924.29	10,538.75	10,214.38
Total Revenue	14,757.89	11,138.97	10,735.27
Profit After Tax	611.29	445.28	358.58
EBITDA	1,088.87	846.18	794.21
Earnings Per Share (EPS) (Basic and Diluted) *	7.77	5.66	4.56

*Values in Rs. millions except EPS 

Also Read: How does an IPO work?

Strengths 

Here are some of the driving factors behind the growth of Western Carriers India Ltd: 

• The company provides tailor-made comprehensive logistics services. Its expertise and nationwide network enable tailor-made solutions, strengthen customer loyalty and deter competitors in a sector with high barriers to entry.
• Its multi-modal logistics services integrate road, rail, sea, air and coastal transport to minimise risks and time delays. The company’s agile model adapts to different locations and adjusts volumes to meet client requirements. Its responsibilities include in-house logistics, security, scanning and shipping approval, and ensuring smooth operations.
• Western Carriers owns comprehensive logistics infrastructure, including commercial vehicles, heavy equipment and shipping containers, along with leased zonal offices, branches and warehouses. The fleet consists of more than 400 commercial vehicles with GPS, 100+ pieces of various heavy equipment and 400+ shipping containers.
• As of December 31, 2022, the company served more than 1,100 diverse clients across sectors such as metals, mining, FMCG, pharmaceuticals, chemicals, oil, gas and others. The top 10 customers contributed Rs. 8,176.37 million, representing 67.75% of the total revenue during the nine months. 

Risks Involved 

Along with the many strong factors, there are always some underlying risks that can deteriorate the company’s finances, reputation, and growth. Here are the notable risks involved with Western Carriers (India) Ltd: 

• The company relies heavily on specific customers, particularly those in the metals and FMCG industries. Its financial stability is closely tied to these industries, so any decline in revenue from these customers poses a threat to its overall business, operations and financial health.
• Western Carriers (India) Ltd relies on network partners, third-party providers and vendors/suppliers for specific operations. Insufficient services or broken relationships with them could disrupt its operations.

Summary 

Western Carriers (India) Ltd IPO is all set to launch with the company having received SEBI’s nod. The company will utilise the proceeds from the IPO for prepayment or scheduled repayment of loans availed by it. The date, lot size, and other details of this IPO are yet to be announced. 

Also Read: How Can You Analyse An IPO?

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