Swastik Roadlines Pvt Ltd, Gwalior based food cargo supply chain service provider, has raised $10 million from India Equity Partners by diluting a significant minority stake. This is the first round of institutional investment in the company, while subsequent rounds of funding are being planned.
Swastik operates under the brand name ‘Coldex’ with a fungible fleet that is expected to cross 500 vehicles shortly. It offers pan-India solutions in both long haul (primary) movement of temperature sensitive cargo as well as intra-city secondary distribution in over 55 cities. It also offers surface transportation for specialised dry cargo.
Gaurav Jain, Managing Director, Swastik Roadlines Pvt Ltd, said: “We will use the capital to strengthen our cold chain capabilities and in developing best-in-class systems that will help in maintaining the company’s growth trajectory.”
KK Iyer, Managing Director, India Equity Partners, said they backed Swastik because of its “unique positioning underpinned by the strong Indian consumer growth story”. He added that the fund will work with the company both at an operating and board level to help them build as a market leader for cold chain services in India. “We will bring our considerable operational experience in facilitating the implementation of management systems and human resource planning as a backbone to Swastik’s exciting growth plans,” he said.
Kolkata-based Utopia Advisors Pvt Ltd was the exclusive financial advisor to Swastik for this equity fundraising.
Cold chain services provide a series of facilities for maintaining ideal storage conditions for perishables from the point of origin to the point of consumption in the food supply chain. The chain needs to start at the farm level (e.g. harvest methods, pre-cooling) and cover up to the consumer level or at least to the retail level. The total cold chain market in India is estimated at $475 million.
Some of the recent deals in logistics space include Kuehne+Nagel (K+N) acquiring RR Enterprises, Coffee Day arm buying Sical Logistics for $35.38 million, Aqua Logistics buying Star Distribution Logistics Pvt Ltd for $2 million and Hitachi Transport System Ltd buying Flyjac Transport Logistics System for $56.1 million.
Recently, privately held Siesta Group, started by first generation entrepreneur Ashok Chattaraj in 2006, raised $10 million from Ashmore Alchemy India, a joint venture between Alchemy Partners LLP and Ashmore Investments (UK).