Mahindra Logistics to float IPO; Kedaara Capital to partially exit

Mahindra & Mahindra Ltd plans to float its logistics arm’s initial public offering that will comprise entirely an offer for sale of a stake by private equity firm Kedaara Capital.

Kedaara Capital and its affiliate Normandy Holdings Ltd will sell as many as 9.66 million shares, representing a stake of up to 13.74%, in Mahindra Logistics Ltd, the diversified conglomerate said in a stock-exchange filing.

The filing didn’t give any other details, including a timeline for the IPO and the amount Kedaara aims to garner from the sale.

Mahindra Logistics was the first company in which Kedaara had invested. The PE firm had, in 2014, agreed to invest  Rs 200 crore ($33.1 million then) in Mahindra Logistics for a 23% stake.

Mahindra & Mahindra held a 74% stake in the logistics company as of March 2017, according to the company’s annual report for 2016-17.

Mahindra Logistics was set up in 2007. It provides logistics solutions, warehousing facilities, freight forwarding and supply chain services.

Mahindra & Mahindra is India’s biggest tractor maker and one of the largest automakers. It also has a software services unit and has business interests in several sectors including financial services, renewable energy, retail and defence.

Kedaara Capital was founded in 2011 by Manish Kejriwal, the former India head of Singapore state investment fund Temasek, and Sunish Sharma and Nishant Sharma, the former managing director and principal, respectively, at global private equity firm General Atlantic in India.

Kedaara Capital had raised $540 million through its debut fund in November 2013. It typically invests $25-75 million in each firm, but has also put in larger sums – $ 200 million or more – in select situations, according to its website.

The PE firm is on the road to raise its second fund and has received a commitment for up to $40 million from International Finance Corporation.

The PE firm has been actively seeking exits. In September last year, Kedaara struck its second exit from a fairly young portfolio firm when it sold part of its holding in automotive components maker Bill Forge Pvt. Ltd to Mahindra CIE Automotive Ltd.

Prior to this, Kedaara Capital had sold part of its holding in AU Financiers India Ltd to high-net-worth individuals, insurance companies and family offices, marking a quick partial exit.

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