Unlisted shares of Western Carriers India Ltd are trading Rs 50 higher in the grey market, signalling a 29.07 per cent listing gain from the public issue.
Western Carriers India IPO: The initial public offering of logistics company Western Carriers (India) Ltd will be closed on Thursday, September 19. The price band of the Rs 492.88-crore IPO has been fixed at Rs 163 to Rs 172 per share for the public issue. Till 10:47 am on the final day of bidding on Thursday, the IPO received a 16.43 times subscription garnering bids for 32,95,88,538 shares as against the 2,00,59,070 shares on offer.
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The category for non-institutional investors received 27.22 times subscription, while the portion for retail individual investors (RIIs) got subscribed 21.08 times. The QIB category received a 20 per cent subscription.
The IPO was opened on September 13.
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 FY2023.
Western Carriers India IPO: Key Dates
The IPO will remain opened for public subscription between September 13 and September 19. Originally, the IPO was scheduled to be closed on September 18 but it has been extended to September 19. The share allotment of the 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.
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Western Carriers India IPO: Price Band
The price band of the Rs 492.88-crore much-awaited IPO has been fixed at Rs 163 to Rs 172 per share for the public issue.
Western Carriers India IPO: GMP Today
According to market observers, unlisted shares of Western Carriers India Ltd are trading Rs 50 higher in the grey market than its issue price. The Rs 50 grey market premium or GMP means the grey market is expecting a 29.07 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Western Carriers India IPO: Analysts’ Recommendations
Giving a ‘subscribe’ recommendation to the IPO, brokerage firm Anand Rathi said, “Over the years, the company plans to enhance its service delivery by
robust growth and operational efficiency. At the upper price band company is valuing at P/E of 21.8x with a market cap of Rs 17,536 million post issue of equity shares and return on net worth of 22.4 per cent. On the valuation front, we believe that the company is fairly priced. Thus, we recommend a ‘SUBSCRIBE’ rating to the IPO.”
It said Western Carriers India intends to enhance its scope of engagement with existing customers by strengthening the existing service offerings, adding new offerings, servicing newer geographies, providing additional value- added services and offering time and cost saving solutions to the customers. Further the company will continue to expand the operational capabilities and expand the network infrastructure and capacity to the extent it assists the company in improving quality metrics and overall performance.
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Another brokerage house Swastika Investmart has given a ‘may apply’ rating to the IPO.
“Western Carriers (India) has exhibited slow but consistent financial growth with a positive trajectory. The IPO’s 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.
StoxBox research analyst Akriti Mehrotra has also given a ‘subscribe’ recommendation, saying, “The current issue is priced at a PE of 16.8 times on the upper band based on FY24 earnings and is relatively lower than its peers. Given its strong financials, strategic initiatives, and positioning 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 mobilised Rs 148 crore from anchor investors a day before its initial share sale opening 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 a circular uploaded on BSE’s website, the company has allotted 85.97 lakh equity shares to 15 funds at Rs 172 apiece, which is also the upper end of the price band. This aggregates the transaction size to Rs 148 crore.
Western Carriers India IPO: More Details
The Kolkata-based company’s Rs 493 crore initial public offering (IPO) 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 a fresh issue of equity shares, aggregating up to Rs 400 crore and an offer for sale (OFS) of up to 54 lakh equity shares worth Rs 93 crore, at the upper end of the price band by promoter Rajendra Sethia.
Proceeds from the fresh issue to the tune of Rs 163.5 crore will be used for debt payment, Rs 152 crore for funding capital expenditure requirements towards the purchase of commercial vehicles, shipping containers, and reach stackers, and the remaining funds towards general corporate purposes.
The company said that investors can bid for a minimum of 87 equity shares and in multiples thereof.
Western Carriers is India’s leading private, multi-modal, rail-focused, asset-light logistics company, with a customer base of 1,647 across varied sectors like metals and mining, FMCG, pharmaceutical, building materials, chemicals, oil and gas, and utilities as of March 2024.
Some of its key customers are Tata Steel, Hindalco Industries, Vedanta, BALCO, HUL, Coca-Cola India, Tata Consumer Products, Wagh Bakri, Cipla, Haldia Petrochemicals and Gujarat Heavy Chemicals, among others.
As of fiscal 2024, the company’s revenue from operations 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 the BSE and NSE.
