VRL Logistics’ IPO covered 62% on day 1; raises $22M from Abu Dhabi’s SWF, others

Goods and passenger transport services provider VRL Logistics Ltd has raised about Rs 140 crore (nearly $22 million) from a bunch of domestic and foreign investors that have come as anchor investors ahead of its proposed initial public offer which opened for subscription on April 15.

The logistics firm has allotted 6.85 million equity shares at a share price of Rs 205 to 15 anchor investors.

Among these, an entity under Morgan Stanley picked a total of 15.81 per cent of the overall anchor investor portion, while Franklin India Smaller Companies Fund, Eastspring Investments India Equity Fund and Abu Dhabi Investment Authority (ADIA) picked 8.55 per cent each. ADIA is the sovereign wealth fund of Abu Dhabi, the richest emirate of UAE.

Other investors included funds managed by UTI MF, Reliance Capital, DSP Blackrock and HDFC MF.

Meanwhile, the firm opened its IPO with a price band of Rs 195-205 a share, which would allow it to raise as much as Rs 492 crore (approximately $80 million) through fresh issue of shares besides an offer for sale by promoter family, and its existing investor and private equity firm New Silk Route (NSR).

At the end of day 1, close to two-thirds of the issue was covered, led by high net-worth investors (HNIs). Stock exchange data shows 62 per cent of the issue was subscribed on the first day. While the HNI portion of the issue was fully covered, institutional investors bid for a little over one-third of the shares reserved for them while retail investors pitched in with over half of their share of the issue.

NSR owns 19.25 million shares representing 22.5 per cent stake in VRL and is divesting over two-thirds of this comprising around 14.55 million shares in the offer for sale.

Sankeshwars, the promoters of VRL Logistics, are also selling a small chunk of shares as part of the secondary offering.

The fresh issue comprises Rs 142 crore, or under a third of the total.

As of mid-day on day 1, almost a quarter of the issue was covered, led by HNIs.

ICICI Securities and HSBC Securities are the bankers to the IPO which closes on April 17.

The proceeds of the issue would be used for expanding the company's existing fleet of goods transportation vehicles, repayment of loan and for other general corporate purposes. Of the Rs 117 crore raised through fresh issuance, it plans to purchase vehicles for Rs 64 crore and repay its debt of Rs 28 crore.

VRL had previously filed its DRHP in December 2010 but did not go ahead with the IPO.

For NSR, this is the second portfolio firm to float IPO this year. Last month, it had cut down its offer-for-sale portion after the IPO of Ortel Communications failed to attract investors. The issue did sail through after the overall issue size was reduced.

(Edited by Joby Puthuparampil Johnson)

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