Western Carriers India IPO Opens for Subscription: Key Details and Analysts’ Recommendations

The initial public offering (IPO) of the logistics company Western Carriers India Ltd has commenced today, opening up opportunities for investment until September 18, 2024. The company, aiming to raise ₹492.88 crore through this equity venture, has already secured ₹148 crore from anchor investors such as Societe Generale, Citigroup Global Markets Mauritius, and others.

As per the company’s statement, the IPO price band has been set between ₹163 and ₹172 per share. The issue includes a fresh allocation worth ₹400 crore and an Offer for Sale (OFS) comprising up to 54 lakh equity shares, valued at ₹92.88 crore by the promoter, Rajendra Sethia.

In terms of investment structure, 50% of the IPO is reserved for Qualified Institutional Buyers (QIB), who can invest in equity shares totaling ₹246 crore. Non-institutional investors are allotted 15% of the issue, amounting to ₹80 crore, while 35% of the stocks, valued at ₹172 crore, are allocated for retail investors.

The funds raised will be utilized to repay borrowings, accounting for ₹163.5 crore, and to finance capital expenditures, specifically the acquisition of commercial vehicles, containers, and reach stackers, with an allocation of ₹151.7 crore. The transaction is expected to bolster the company’s competitive positioning in the logistics market.

Having been incorporated in March 2011, Western Carriers serves a prestigious clientele, including Tata Steel, Hindalco Industries, Vedanta, BALCO, and DHL, among others. The company’s financial performance registers a 3% increase in revenue and a 12% rise in profit after tax (PAT) as per the recent fiscal year evaluation ending March 31, 2024.

Link Intime India will serve as the official registrar for this IPO, with JM Financial and Kotak Mahindra Capital acting as the lead managers for the book building. Investors can expect to see the final allotment by September 19, with shares tentatively listed on BSE and NSE by September 23, 2024. The current grey market premium (GMP), reflecting potential investor sentiment, indicates a neutral trajectory at the moment, with no listing premium observed.

Market analysts, including those from Anand Rathi, provide a ‘subscribe’ recommendation for the IPO, citing its reasonable pricing relative to peers. While some firms like Swastika Investmart urge caution due to the operational risks, the general sentiment leans towards long-term gains for investors with a higher risk appetite.