Western Carriers (India) Limited IPO: Check IPO Date, Lot Size, Price & Details

About the Company:

Western Carriers (India) Limited is recognized as India's largest private, multi-modal, rail-focused, asset-light logistics provider in terms of container volumes for Fiscal 2023. According to the 1Lattice Report, its market share based on container volumes handled was 6% in the domestic market and 2% in the EXIM market for the same fiscal year. The company, along with its Promoter, Rajendra Sethia, has over fifty years of combined experience in multi-modal transport for both domestic and EXIM cargo in and out of India.

The company offers a variety of value-added services throughout the supply chain. It provides customized, end-to-end 3PL and 4PL logistics solutions by integrating road, rail, water, and air transportation. As of March 31, 2024, the company has served around 1,600 customers through its presence at more than 50 branches. The TEU volume for FY2024 is 212,500, up 10.03% YoY. From FY2022 to FY2024, the company’s revenue and EBITDA have grown at a CAGR of 4.65% and 11.72%, respectively.

IPO Details:

Objects of the Offer:

The Net Proceeds (Gross Fresh Issue proceeds less Offer related expenses in relation to Fresh Issue) are proposed to be utilized as follows:

Key Strengths and Opportunities:

• Long-Standing Customer Relationships: The company has customers across varied sectors such as metals, FMCG, pharmaceuticals, chemicals etc. Its key customers include Tata Steel, HUL, Cipla etc. In Fiscal 2024, 80% of the company’s revenues came from customers who had been transacting with them for over three years, and the customer retention rate for their top 10 clients was 100%.
• Comprehensive Logistics Infrastructure: As of March 31, 2024, the company had 16 leased warehouses and owned over 400 GPS-enabled commercial vehicles, 100+ pieces of heavy equipment, and 500+ shipping containers. It provides jumbo rakes for 1,500-2,000 metric tons of cargo and mini rakes with 20 wagons. These assets, along with its fleet of leased and owned vehicles, ensure seamless road and rail transport integration.
• Fast-Growing Logistics Market in India: According to the 1Lattice Report, the multi-modal (rail-road) logistics market in India is expected to grow at a CAGR of 22% from Fiscal 2024 to Fiscal 2029 to reach Rs. 4,667 billion. In a market with inherent entry barriers, the company is strategically positioned to capitalize on favorable trends and initiatives within the Indian logistics industry, thanks to its execution capabilities.
• Asset Light and Scalable Business Model: The company primarily uses an asset-light business model, leasing most of its operational infrastructure from network partners. This approach allows control over capacity, availability, fleet management, and logistics operations without burdening the balance sheet. It only owns assets specifically designed for customer needs or those crucial for efficient supply chain management.

Risk factors:

• Risk of Customer Concentration: The company relies on key customers for a significant portion of its revenue, especially from the metals and FMCG industries. In Fiscal 2024, the top 10 customers contributed over 70% of revenue from operations. Fluctuations in these industries' performance could result in customer loss, reduced volume, or lower pricing.
• Dependence on Network Partners and Service Providers: The company relies on network partners, third-party service providers, and vendors/suppliers for various aspects of its operations. Unsatisfactory performance or disruptions in relationships with these entities could adversely affect its operations.
• Potential Impact of Change in Control of Key Logistics Partner: The company has a long-standing relationship with a major Indian rail container logistics provider currently controlled by the government. Payments to this provider account for a substantial share, over 40% of cash operating expenses. A change in control of this provider could negatively impact the company's relationship with them.
• Cost and Pricing Risk Exposure: The company may be unable to pass on cost increases imposed by third-party service providers to its customers. Conversely, it might also struggle to pass on any reductions in customer prices to these service providers. Additionally, the company is exposed to risks related to rising fuel prices.
• Significant Working Capital Requirements: Delays or defaults in customer payments and the tightening of payment terms by third-party service providers, could negatively impact the company’s cash flows. Its working capital days have risen from 58 as of March 31, 2022, to 96 as of March 31, 2024.

Financial Snapshot:

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