The logistics sector in India continues to see investments from large private equity (PE) investors. In the latest event, Everstone Capital, which has assets under management worth is $1.7 billion (Rs 9,141 crore), has acquired a significant minority stake in Transpole Logistics. The deal size is learnt to be around Rs 220 crore.
Headquartered in New Delhi, Rs 500-crore Transpole has a presence across India and in other regions such as China, South Korea and South-east Asia. Founded in 2004 by logistics professionals Anant Kumar Choudhary, Vivek Shukla and Praveen Chand Rai, Transpole is one of the leading freight forwarders in India. It offers logistics services in areas of freight forwarding, transportation, customs clearance, project logistics, warehousing and distribution.
According to people aware of the development, Transpole plans to expand its international offices in China, Malaysia, Singapore and South Korea with the new funding. Also, it will explore opportunities in value-added services business such as and warehousing and distribution.
Through this second round of funding, existing PE investor Fidelity Growth Partners will make a part-exit from Transpole. Fidelity had invested about Rs 60 crore in April 2011.
Confirming the development, Dhanpal Jhaveri, chief executive officer and partner at Everstone Capital, said: “The company is led by a highly entrepreneurial team and is at a very promising phase. We like the sector and are confident that we will be able to scale up Transpole’s business in India and overseas.”
The year 2012 witnessed about 14 deals worth $281 million in the logistics space in India, against 10 deals worth $195 million in 2011, according to data from VCCedge. The sector has witnessed 88 deals worth $1.4 billion since 2007. Everstone, which runs two PE funds, has made its investment in Transpole through the second fund--the $580-million Everstone Capital Partners.
Other investments from a second fund include YLG Salon, S Chand Publications, Sohan Lal Commodities and Crystal Crop Protection. The first fund — the $425-million Indivision India Partners, raised in September 2006 — made investments in companies such as Tikona Digital, VLCC, Tops Securities, Sula Wines, Lilliput, Capital Foods and Centrum Capital.
According to a recent Deloitte and Indian Chamber of Commerce study, the market size of the logistics sector in India is in the range of $90-125 billion, and is growing at the rate of 15 per cent with sub-sector growing at even 30-40 per cent per annum.
The largest PE deals in the Indian logistics space include General Atlantic's $104-million investment in Fourcee Infrastructure, Warburg Pincus' $100-million investment in Chennai-based Continental Warehousing, KKR and Goldman Sach's $53-million deal with TVS Logistics and Blackstone's investment in Allcargo Logistics.
Related story: Tata Capital, Everstone in race for Transpole Logistics' stake