Western Carriers (India) Ltd. (WCIL), India’s largest private multi-modal, rail-focused, asset-light logistics company, is all set to make its debut in the stock market with a combination of a fresh equity issue and an offer for sale (OFS). With expertise in handling both domestic and EXIM cargo across road, rail, and sea, WCIL managed 6% of domestic and 2% of EXIM container volumes in Fiscal 2023, as per the 1Lattice Report.
Operating on a scalable asset-light model, WCIL offers a comprehensive range of 3PL and 4PL logistics solutions. The company customizes its services to meet the unique logistics needs of its diverse client base, spanning sectors such as FMCG, metals, pharmaceuticals, chemicals, and retail. Notable clients include Tata Steel (NS:TISC), Hindalco (NS:HALC), and Cipla (NS:CIPL). WCIL's long-term relationships with its clients are a key driver of its growth, with 80% of revenues in Fiscal 2024 coming from customers it has served for over three years, and a 100% retention rate for its top 10 clients.
WCIL's IPO, opening on September 13, 2024, consists of a fresh issue of INR 400 crore and an OFS worth INR 92.88 crore, with a price band of INR 163 to INR 172 per share. The total IPO size is INR 492.88 crore, representing 28.11% of the company's post-IPO equity. WCIL plans to use the proceeds for debt repayment, fleet expansion, and general corporate purposes.
Financially, the company has demonstrated steady growth, with revenues of INR 1,691.41 crore and a profit of INR 80.35 crore in Fiscal 2024. The issue is priced at a P/E of 21.83 based on FY24 earnings, making it reasonably attractive for investors. WCIL also boasts a return on capital employed (RoCE) of over 29% for the past three fiscals, indicating efficient use of capital.
Investors should note that the stock’s grey market premium (GMP) is currently at INR 55 per share, suggesting good market interest. With the increasing demand for logistics services driven by infrastructure development and business expansion in India, WCIL is well-positioned for future growth. For medium to long-term investors, this IPO could be a promising opportunity.
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