Western Carriers IPO: Subscribed 1.57 Times on Day Two Amid Strong Retail Interest
The Initial Public Offering (IPO) of Western Carriers (India) has attracted significant investor interest, being subscribed 1.57 times on its second day of bidding. This Kolkata-based logistics company is looking to raise ₹492.8 crore through its IPO, which opened for subscription on September 12 and will close on September 18, 2024.
Main Points
Overview of the Western Carriers IPO
Western Carriers has set a price band for its shares between ₹163 and ₹172. The IPO consists of a fresh issue of equity shares worth up to ₹400 crore and an offer for sale (OFS) of around 54 lakh shares valued at approximately ₹93 crore by promoter Rajendra Sethia. The funds raised from this IPO are earmarked for various purposes, including debt repayment, capital expenditure for purchasing commercial vehicles and shipping containers, and general corporate needs.
Western Carriers IPO Subscription Details
On the second day of bidding, the IPO saw bids for approximately 3,28,39,194 shares against an offer of 2,08,68,467 shares. The retail individual investors (RIIs) segment has shown particularly strong interest, being subscribed 4.27 times. In contrast, the non-institutional investors (NIIs) category received a subscription rate of 2.43 times, while qualified institutional buyers (QIBs) lagged behind with only 1% subscription.
This positive response from retail investors is noteworthy as it indicates confidence in Western Carriers’ business model and growth prospects. The company has established itself as a key player in India’s logistics sector and serves a diverse clientele across various industries.
Western Carriers IPO Financial Performance
Western Carriers has demonstrated steady financial growth in recent years. Here’s a snapshot of its revenue and net profit over the last few financial years:
| Particulars | FY22 | FY23 | FY24 |
|---|---|---|---|
| Revenue | ₹1,470 crore | ₹1,633 crore | ₹1,685 crore |
| Net Profit | ₹61.1 crore | ₹71.5 crore | ₹80.3 crore |
The company’s revenue grew by approximately 3% from FY23 to FY24, while net profit increased by about 12%. Such consistent growth could be a significant factor attracting investors to its IPO.
Business Model and Clientele
Western Carriers operates as an asset-light logistics company focused on multimodal transportation solutions. This includes rail and road transport services tailored to meet the diverse needs of various sectors such as metals and mining, FMCG (Fast-Moving Consumer Goods), pharmaceuticals, building materials, chemicals, oil and gas, and utilities.
As of March 2024, the company boasts a customer base of around 1,647 clients. Some notable names include Tata Steel, Hindalco Industries, Vedanta, Coca-Cola India, and HUL (Hindustan Unilever). This wide-ranging clientele underscores Western Carriers’ ability to cater to different market segments effectively.
Use of Proceeds
The proceeds from the fresh issue will be allocated as follows:
- Debt Repayment: Approximately ₹163.5 crore will be used to pay off existing borrowings.
- Capital Expenditure: About ₹151.7 crore is planned for capital investments in commercial vehicles and shipping containers.
- General Corporate Purposes: The remaining funds will support various corporate initiatives.
This strategic allocation of funds aims to strengthen the company’s financial position while facilitating further growth.
Western Carriers IPO Market Sentiment and Future Outlook
The strong subscription numbers reflect positive market sentiment towards Western Carriers’ IPO. Investors seem optimistic about the company’s future prospects in the logistics sector. With the increasing demand for efficient logistics solutions driven by e-commerce growth and industrial expansion in India, Western Carriers is well-positioned to capitalize on these trends.
The involvement of reputable book-running lead managers such as JM Financial and Kotak Mahindra Capital Company adds credibility to this offering. Furthermore, the expected listing date for the equity shares is tentatively set for September 23 on both BSE and NSE.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
