By Bharadwaj Sharma
Kishore Biyani led Future Group’s logistics arm, Future Supply Chain Solutions is planning to raise up to Rs 650 crore from its initial public offering (IPO). The company has set a price band of Rs 660 to Rs 664 per share for its IPO, and at the upper band this could value the company at about Rs 2,660 crore. The IPO, which is a 100% offer for sale (OFS) of 97.83 lakh existing shares is scheduled to open on December 6 and close on December 8. Bids can be made for a minimum of 22 equity shares and multiples of 22 thereafter. The Offer constitutes up to 24.43% of the post-offer paid-up equity share capital. Private equity investor, Griffin Partners, will sell its near 20% stake (78.27 lakh shares) to exit the company, while promoter group venture, Future Enterprises will sell another about 5% stake (19.56 lakh shares). The equity shares of Future Supply Chain Solutions are proposed to be listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE). Edelweiss, Nomura, IDFC Bank, IIFL and Yes Securities are the book running lead managers to the issue.
Future Supply Chain is a third party supply chain and logistics service provider. For fiscals 2017, 2016 and 2015, the company’s revenue from operations was Rs 561.18 crore, Rs 519.8 crore and Rs 407.96 crore, respectively, representing a CAGR of 17.3 % over the last three years. The logistics service provider has 46 distribution centres (including 4 temperature-controlled distribution centres), 14 hubs and 105 branches, seving 11,228 pin codes across 29 states and 5 union territories, creating a pan-India supply chain network. “Logistics sector as a whole looks promising. Companies that are able to provide end to end solutions and add value to the manufacturer are worth investing in,” said a fund manager requesting anonymity.
Future Supply Chain will become the group’s sixth firm to list on the exchanges. Other listed firms are Future Retail, Future Consumer, Future Market Networks, Future Enterprises and Future Lifestyle Fashions. The company posted a net profit of Rs 45.8 crore in FY17. Future Supply Chain boasts better EBIDTA margins than most of its peers, at 13% vis-a-vis between 6% to 13% for Allcargo Logistics, Blue Dart Express, Mahindra Logistics and Gati.