Kedaara Capital strikes debut deal, invests $33M in Mahindra Logistics

Private equity firm Kedaara Capital has invested Rs 200 crore ($33.1 million) in Mahindra Logistics Ltd (MLL), a subsidiary of Mahindra & Mahindra Ltd, for a significant minority stake, the company said in a release. This marks the first deal for the PE firm floated in 2011 which raised its maiden fund last October.

VCCircle was first to report that Kedaara Capital is in talks to invest in Mahindra Group’s privately held firm Mahindra Logistics.

“We are privileged to have a long-standing, trust-based relationship with the Mahindra Group and are excited at this opportunity to work alongside a terrific management team to help create a world class 3PL company. Further, our collaboration with Mahindra Partners will allow us to exploit many other opportunities together," said Manish Kejriwal, managing partner, Kedaara Capital.

Sunish Sharma, managing partner, Kedaara Capital, added, “Third party logistics is one of the most attractive sub-segments of the Indian logistics industry. It is growing rapidly, driven by the recognition of efficiencies and competitive advantages added by integrated 3PL service providers and the growth of the underlying Indian economy. Mahindra Logistics is uniquely positioned to leverage these tail winds given its scale, differentiated capabilities and high quality professional management team.”

"Kedaara will add significant value to our expansion plans as well as in evaluating and executing an acquisition led growth strategy. This is a significant step towards an IPO by 2017 and achieving our vision of being India’s most preferred integrated logistics service provider,” said Pirojshaw Sarkari, CEO, Mahindra Logistics.

Mahindra Logistics, a subsidiary of automaker Mahindra & Mahindra Ltd, is a third party logistics (3PL) service provider. It takes care of M&M’s supply chain needs, including inbound and outbound logistics, inter-plant movement, warehousing, line-feed and value-added services among other solutions.

It also provides people transport solutions, a specialised line of business which helps corporate clients move employees to and from the workplace.

In 2009, the Mahindra Group identified logistics as a key focus area, and since then Mahindra Logistics has been part of the Mahindra Partners division, the $800 million quasi private equity division of the Mahindra Group.

According to Parag Shah, managing partner, Mahindra Partners, “We tap the group’s unique strengths of constant innovation, prudence and creative business models while incubating new ventures. Kedaara perfectly complements our strategy and is the ideal partner for MLL. For the Mahindra Group, a total investment of Rs 30 crore to date has now achieved a multifold return.”

Founded by former Temasek head Manish Kejriwal and former MD of General Atlantic Sunish Sharma, Kedaara Capital provides growth capital to companies operating in India and seeks to invest between $75 million and $100 million. In October 2013, it closed its debut fund at $540 million.

(Edited by Joby Puthuparampil Johnson)

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