Subscribe to Mahindra Logistics IPO for medium to long term perspective | The Indian logistics industry is likely to grow | Outlook | Price | Strengths | Indianotes.com
Objects of the Issue
– The offer comprises of only an Offer for Sale (without any fresh issue of Equity Shares by the Company). The company will not receive any proceeds from the OFS.
– The proceeds of the IPO will be used for the following:
(i) to achieve the benefits of listing the Equity Shares on the Stock Exchanges and
(ii) For the Offer for Sale.
Performance Highlights – For the period of FY 15-17, its operating income and PAT grew at a CAGR of ~17% and ~7% respectively. For the quarter ended June 2017 company’s total revenue and PAT stood at Rs. 854 crore and Rs. 15 crore, respectively.
“Asset-light” business model – MLL’s “asset-light” business model enables them to offer a variety of flexible, scalable, solutions and services based on client’s requirements and handle complexities that are unique to the Indian logistics industry and thus serves over 200 domestic and multinational companies operating in several industry verticals in India, including automotive, engineering,consumer goods, pharmaceuticals and e-commerce. This helps to reduce capital expenditure requirements and mitigate the effects of operational risks. Customized, technology driven logistics solutions – Company focuses significantly on technologies which enabled them to offer cost-efficient and customized logistics solutions to the clients. . MLL’s technology systems have also enabled them to control and command operations, undertake real-time tracking of vehicles, provide end-to-end visibility of operations and make timely corrective interventions. Company has developed two distinct transport management systems, namely Mahindra Integrated Logistics Execution System (MILES) and MyCargo360.
Integrated, end-to-end logistics services and solutions – MLL’s integrated, end-to- end logistics services focus on creating solutions that address the requirements of clients across their SCM and PTS businesses.
Recommendation – The Indian logistics industry is expected to grow and Mahindra Logistics Ltd, an arm of automobile giant Mahindra and Mahindra Ltd will be benefitted from these rising opportunities. MLL’s focus on enhancements in technology, leveraging on the changing logistics industry dynamics particularly with the implementation of GST regime and exploration in new business opportunities in new industry verticals shows bright prospects in the future. Hence, we recommend to SUBSCRIBE the issue for medium to long term perspective.
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