Logistics is still a preferred sector for private equity firms. Leading Indian growth equity PE firm, Fidelity Growth Partners India (FGPI), has invested $13.5 million for a significant minority stake in Transpole Logistics Pvt Ltd, a Delhi-based supply chain solutions firm.
The company has a presence across India, China, Hong Kong, Korea and South East Asia. It offers asset light, integrated logistics solutions with services such as freight forwarding, warehousing, distribution, project logistics, last mile operations, and 3PL (third party logistics) advisory.
There have been 50 private equity deals in the logistics sector so far, according to VCCEdge. There were three deals this year alone in logistics – Warburg Pincus’s $100 million in Continental Warehousing Corp, Infrastructure India Holding’s investment in Aegis Logistics Ltd and Infrastructure India’s investment in Vikram Logistics. The PE firms are essentially looking at asset light, supply chain solutions firms.
Transpole Group, which follows an asset light and integrated model, was founded in 2004 by experienced logistics professionals Anant Kumar Choudhary, Vivek Shukla, and Praveen Chand Rai. Phillip Ng, ex-managing director of Fedex Asia Pacific, later joined them to help drive the Asian expansion.
Over the last four years, Transpole has registered a cumulative revenue growth of 73% and PAT growth of 117%, a press release said. The company is expected to have revenues of Rs 350 cr in the current financial year.
The funds raised from Fidelity will be utilised to expand operations in India and Singapore and build up a Pan-Asian Network of offices or JVs across Korea, China, Hong Kong and Malaysia, the release said.
Raj Dugar, Senior Managing Director and Abhinav Sinha, Director with FIL Capital Advisors (India), the private equity advisory arm for FGPI, will join the board of Transpole.
Centrum Capital Ltd. was the sole financial advisor to Transpole Logistics for the transaction.
Sandeep Upadhyay, Head, Infrastructure & Logistics, Centrum Capital Ltd said, “Though third party logistics industry is currently fragmented but has managed to attract sustained interest from private equity funds due to limited capital investment requirements and prolific growth demonstrated by Companies operating within this segment.”
Upadhyay has been quoted as saying in Mint newspaper that the company is targeting an initial public offer by 2015 while intending to grow to a Rs1,000 crore company by sales in next three to four years.