IPO Issue – VRL Logistics Ltd – April 2015

VRL Logistics Ltd  is coming up with a further Public Offer  (IPO) of its shares between 15 April 2015  to 17 April 2015.

The price band of issue is Rs. 195 (Floor Price) to Rs. 205 (Cap Price).

The minimum application size and bid lot  65 Equity Shares and in multiples of 65 Equity Shares thereof.

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[wptabtitle] Issue Details[/wptabtitle] [wptabcontent]

VRL IPO Payment Schedule for Retail Application  

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[wptabtitle] Company Profile[/wptabtitle] [wptabcontent]

About Company Business:

VRL Logistics Ltd (VRL) is one of the leading pan-India surface logistics and parcel delivery service providers, with the largest fleet of owned and operated commercial vehicles in the private sector in India. VRL’s goods transportation network spans across India through 624 branches and 346 agencies.

As of December 31, 2014, the company’s owned fleet of goods transportation vehicles stood at 3,546. This allows the company gain access even to the remote regions of the country. At the higher price band of Rs205, the stock is valued at 7.6x annualized FY2015E EV/EBITDA and appears attractive as compared to its listed peers such as Transport Corporation of India (TCI) and Gati which trade at 12.2x and 16.6x FY2015E EV/EBITDA, respectively.

With the government’s thrust on infrastructure improving, the logistic sector is set to be on a growth trajectory, we expect VRL to be a beneficiary of the same. Given the company’s good track record coupled with reforms in the transportation industry, healthy financials and comfortable valuations 

Objects of the issue: The IPO consists of 0.57-0.60 crore fresh issue of shares aggregating up to Rs117 crore and the balance an offer for sale of 1.71 crore shares by promoters aggregating up to Rs351 crore. The proceeds would be utilized for: a) Purchase of goods transportation vehicles, b) Repayment/pre-payment of loan and c) General corporate purposes.

Potential opportunities seen in the logistic sector: Over 2009-14, the logistics market in India has grown at a 9% CAGR to stand at $120 billion in 2014. With the government’s increasing thrust on the transportation segment and initiatives like ‘Make in India’ along with increasing investments are expected to provide potential opportunities for the logistics sector. Further, the implementation of the Goods and Service Tax (GST) would be an added growth trigger for the sector.

Large fleet of owned vehicles: As of December 31, 2014, VRL’s owned fleet of goods transportation vehicles stood at 3,546. VRL also provides bus services focused on urban commute and connection between tier 2 and 3 cities. As of December 31, 2014, VRL owned and operated 455 buses (including 53 staff buses). It has dedicated in-house maintenance facilities and technology capabilities which ensures efficient running of vehicles and quality service.

Risk factors:

1. Increase in fuel costs,
2. Delay in supply of equipment by third parties and
3. Change in vehicle emission and age norms;

Valuations: At the higher price band of Rs205, VRL is valued at 7.6x annualized FY2015E EV/EBITDA and appears attractive as compared to its peers TCI and Gati which trade at 12.2x and 16.6x FY2015E EV/EBITDA, respectively. We believe the current valuations of VRL are comfortable as compared to its listed peers and recommend investors to Subscribe to the IPO.

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[wptabtitle] Allotment & Listing Details[/wptabtitle] [wptabcontent]

 Allotment Link VRL IPO 

VRL Logistics Ltd -ISIN, Script Code, Listing & Allotment Details in Below Table-  

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Collection Center @ Pune

7, Omkar Corner, opp Cosmos Bank ,

Tilak Road, Sadashiv Peth,

Pune 411030

Mobile:  800 775 0904 / 77 1991 7444