Private equity firm New Silk Route has invested Rs 175 crore in VRL Logistics Ltd, a company based in Hubli, Karnataka. This is NSR’s first investment in the logistics and transportation sector. The Asia-focused private equity and growth capital firm currently has $1.4 billion assets under management.
Out of the total Rs 125 crore was through fresh issue and the balance Rs 50 crore went to promoters who diluted their holding in the privately held firm.
VRL had filed its DRHP (draft red herring prospectus) with the market regulator SEBI in December 2010. The company had plans to sell 23.5 million shares or 25 per cent stake in the issue.
This is the second such investment in April 2012. Earlier, Mumbai-based IT solutions provider Trimax IT Infrastructure and Services, which had also filed its DRHP last year, raised Rs 100 crore ($20 million approx.) from a fund managed by Aditya Birla Capital Advisors.
A number of similar investments took place since 2011, with companies like One97 Communication (raised funding from SAP Ventures), PNC Infratech (NYLIM Jacob Ballas), Avantha Power & Infrastructure Ltd (KKR, Faering Capital), Max Flex and Imaging Systems Ltd (Reliance Equity Advisors) raising PE funding instead of IPOs.
VRL was started in 1976 by Vijay Sankeshwar and now claims to be the largest fleet-owner in India with 3,481 Vehicles, including 420 tourist buses and 3,061 goods transport vehicles as of January 31, 2012. It has also expanded its business to include courier service, express cargo and air chartering. VRL operates wind mills as well and currently has an installed capacity of 51 MW. It has further plans to set up a cement plant with a capacity of 2 million tonne per annum. Recent reports suggest that VRL is looking to exit its windmill and cement business.
According to an ICRA report, VRL Logistics had operating income of Rs 892.3 crore during FY11 with adjusted PAT of Rs 51.7 crore. The company is expected to hit revenues of Rs 1,040 crore for FY12.
New Silk Route has recently invested in Hyderabad-based education support services provider Varsity Education Management Pvt Ltd and acquired a majority stake in South Indian food chain Adiga