AFL Logistics is considering sale of up to 25% stake to private equity (PE) investors, according to its CMD Cyrus Guzder.
“Indian logistics business is growing at over 8% year-on-year. It needs the backing and support of the private equity firms. The idea of the proposed dilution of equity by a fourth to PE investors is to capture more opportunities,” Mr Guzder told ET. The proposed investment of PE players may be followed by an initial public offering, if the market conditions improve, he said. He and his associates own 100% stake in AFL.
The logistics industry has become a hotbed of PE investments. Eight deals have witnessed PE players investing $175 million in the first four months of this fiscal. The list includes DRS Logistics (Rs 100 crore from Kotak Mahindra), Sical Logistics (Rs 110 crore from IDFC), Allcargo Global ($60 million from Blackstone) and BLR India (Rs 50 crore from Reliance Capital). Tata Capital and Merrill Lynch have invested undisclosed amount in Quick Jet Cargo and Om Logistics, respectively.
AFL is gearing up to meet the growing demand in the domestic logistics space. It plans to growth both organically and inorganically. At present, AFL’s business includes logistics, express courier service and international cargo business.
The logistics division provides door-to-door service, movement of goods, warehousing and customized inventory management related services while the express division caters to the courier needs of organisations as well as individuals. The cargo division focuses on air and sea freight forwarding and customs clearance.
Last month, AFL Private, a part of the AFL group, sold out its remaining 24% stake in Indtravels Private Ltd to Carlson Wagonlit Travel.
The CWT had entered into joint venture with AFL some 10 years ago, beginning with a partnership which was transformed into a 50:50 joint venture in 2000.
Source: Economic Times