1. Mahindra Logistics share price recovers slightly after opening 3% lower than IPO price on stock exchange debut

Mahindra Logistics share price recovers slightly after opening 3% lower than IPO price on stock exchange debut

In the afternoon trade, Mahindra Logistics share price recovered marginally from the morning fall of 3% but still trading 0.12% lower at Rs 428.5 on BSE.

By: | Updated: November 10, 2017 12:47 PM
Mahindra Logistics is the seventh Mahindra Group brand to enter the stock market. (Image: Company Website)

Shares of Mahindra Logistics fell on the first day of trading marking a flat debut on the stock market on Friday after the company recently winded up its Rs 829 crore IPO last week. The stock of Mahindra Logistics opened 0.7% higher (from its issue price of Rs 429) at Rs 432 on BSE while it started flat at Rs 429 on NSE. Mahindra Logistics is a third-party logistics service provider which raised Rs 829.35 crore at the upper end of the price band. Within minutes of trading, shares of Mahindra Logistics fell 3% to hit the day’s low of Rs 416.1 on NSE and 2.9% to Rs 416.55 on BSE. In the afternoon trade, shares of Mahindra Logistics marginally recovered from the morning decline but still trading 0.12% lower at Rs 428.5 on BSE. The stock also made a high of Rs 433.95 (up 1.15% from its issue price). (Track the live stock quote here)

Mahindra Logistics is the seventh Mahindra Group brand to enter the stock market. Mahindra Group has six more companies that are listed on Indian stock exchanges namely, Mahindra and Mahindra, Tech Mahindra, Mahindra and Mahindra Financial Services, Mahindra Holidays & Resorts India, Mahindra CIE Automotive and EPC Industries.

The IPO of Mahindra Logistics didn’t comprise a fresh issue of equity shares. The public offer was based on 100% share sale through the OFS (offer for sale) route from its existing shareholders totalling 1.93 crore equity shares at face value of Rs 10 each. Three promoters sold a sizeable portion of their shareholding through OFS route. The OFS included 96.66 lakh shares by Mahindra and Mahindra, 92.71 lakh shares by Normandy Holdings and up to 3.95 lakh equity shares by Kedaara Capital Alternative Investment Fund (AIF). Also, the offer includes a reservation of up to 1.25 lakh equity shares for subscription by eligible employees with a discount of Rs 42 per share.

Kotak Mahindra Capital Company Limited and Axis Capital Limited are the book running lead managers while Link Intime India Private Limited is the registrar to the issue. Based on basic EPS for the year ended 31 March 2017 on a standalone basis, the shares of Mahindra Logistics have a P/E ratio of 65.2. Mahindra Logistics raised a little over Rs 247 crore from anchor investors. The company’s IPO committee has allocated 57,62,203 equity shares to 15 anchor investors at Rs 429 apiece.

All the IPO proceeds will go to the promoters and none to the company. “As the offer is an offer for sale and our company will not receive any proceeds from the offer, our company is not required to appoint a monitoring agency for the offer,” according to DRHP. Mahindra Logistics is one of India’s largest third-party logistics solutions providers in the Indian logistics industry. The company said it has an “asset-light” business model pursuant to which assets necessary for its operations such as vehicles and warehouses are owned or provided by a large network of business partners.

  1. Firstchoiceipo Analysis
    Nov 12, 2017 at 2:09 pm
    The IPO has been irrationally priced. The company has reported an EPS of Rs 6.62 for the FY 17. THe enterprise is likely to report an EPS of Rs 7.50 for FY 18. The offer is made around 50PE, which is expensive, for a business model which has no entry barrier. The EPS is misleading. Total owner’s capital as on 31-03-2017 is Rs 368.74 cr, which includes CCPS of Rs 301 cr. If one takes CCPS equity also into account, the EPS for FY 17 comes to just Rs 1. We had advised the investors to stay away fro the IPO.
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