Patel Integrated Logistics is considering a second round of capital raising through the qualified institutional placement route to fund expansion plans.
Promoters intend to raise stake, too, via creeping route
MUMBAI: Patel Integrated Logistics (PILL), one of India’s leading logistic firms, is considering a second round of capital raising through the qualified institutional placement route to fund expansion plans.
The company is also going for a listing on the National Stock Exchange.
With the money raised, PILL is set to change its image of being a transport company to an integrated express delivery provider and a third- and fourth-party logistics provider.
“We are bullish about the market and want to scale up our business and raise our turnover to Rs 1,000 crore and also the market cap, over the next three-five years,” said Ariff Patel, executive vice-chairman, PILL.
The company is also looking at a profit of close to Rs 20-30 crore in the next 3-5 years and a profit-after-tax margin of 3-5%.
PILL closed last fiscal with a topline of Rs 280 crore.
In the wake of establishing themselves as an express delivery company, PILL will invest in acquiring about four super express hubs in the next three to four months and expects them to be fully operational in about six months time.
These hubs are centres where regional express cargo is collated and dispatched and are currently outsourced.
Bhiwandi and Chakan in Maharashtra and one location each in Gujarat and West Bengal have been identified for these hubs.
PILL will also set up 32 new warehouses across the country to support its logistics business.
The company has recently acquired 24 new vehicles and will acquire about 20-40 more in this financial year.
Patel added that the company is not looking at expanding the transportation business, but now is focused on the express cargo segment. PILL is also open to any strategic partnerships that can increase the product offerings.
With all of the proposed growth plans, PILL wants to grab a larger share of the express delivery market, currently dominated by Gati and Safex.
“We are looking at taking about 15% share of this market, which would add about Rs 40-50 crore of gross margin to our existing bottomline,” Patel added.
Creeping acquisitions
Meantime, the promoters intend to increase their stake to majority from the current 41.3%.
The promoters — or the Patel family — have been acquiring shares from the market and over the last two quarters have raised their stake by about two percentage points.
“We plan to increase our stake substantially to 50% through preferential issues and creeping acquisitions,” said Patel.
PILL was formed in 2006 with the amalgamation of Patel Roadways and the listed company Patel On-Board Couriers, and provides unified solutions through door- to-door express cargo service, surface transport, air and sea transportation, besides offering services in warehousing and secondary distribution.
The amalgamation saw the promoter holding falling from about 56% to below majority.
PILL on Wednesday said it would come out with a preference offer of 18 lakh equity shares and 8 lakh warrants at Rs 74 per share and warrant, thereby raising about Rs 19 crore.
This issue would see the promoter stake reduce further to 38% and foreign institutional investor stake rising to about 4% from under 0.4% currently.
As per Securities and Exchange Board of India (Sebi) regulations on creeping acquisitions, any person or institution can increase their stake in a company by a maximum of 5% per annum without triggering the open offer.
The Patel family would be using this route to increase their holding in the company.
s_archana23@dnaindia.net
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