Apollo logistics firm looks at fund raising for expansion plans
Integrated logistics solutions provider Apollo LogiSolutions would complete its $120-million dollar fund raising plan to partly finance expansion in the domestic market. It is also likely to unveil plans to launch an initial public offer by the end of the month.
Besides expanding warehousing space in India and overseas, the company, which is a 90 per cent subsidiary of Apollo International, part of the Onkar Kanwar-promoted Apollo group, would utilise funds for acquisition of one logistics company each in the local as well as international market.
“Growth in logistics-related business lines and improving IT systems within the company are a top priority,” Raaja Kanwar, vicechairman and managing director, Apollo International, told Business Standard.
Some funds will be invested to improve liquid logistics business, he added. However, Kanwar did not elaborate on the company’s IPO plan.
Last year, Apollo LogiSolutions entered into a pact with Singapore-based Pacific International Lines (PIL) to explore logistics opportunities in India.
The first MoU between Apollo LogiSolutions and PIL is for mutual cooperation in container freight station and allied services whereas the second between Apollo and Singamas (a subsidiary of PIL) is to jointly pursue transportation of specialised liquids in India.
The new company will focus on movement of all types of non-POL (petroleum, oil and lubricants) liquids either by rail or road, operation and management of movement of liquid tanks, their maintenance and cleaning.
The proposed move would enhance logistic service relating to container freight station, inland container depot, freight forwarding, custom brokerage, warehousing and allied services. The initial investment planned for the JV firm for liquid logistics operations is about ~300 crore, Apollo will hold 70 per cent stake and the remaining rest will be with Singamas Container Holdings.
Meanwhile, experts see a $50-billion business opportunity in India. “As the Indian logistics industry shifts from unorganised to organised, the need for supply chain performance improvement and the need for logistics companies that serve as supply chain partners will help advance investment opportunities,” according to a report by Alvarez & Marsal (A&M), a business advisory firm.
Currently, poor industry management, combined with high amounts of waste, losses due to transit damages and limited adoption of technology, create significant challenges, the report said.
The Indian logistics market was estimated at approximately ~8.1 trillion in FY16. It is expected to grow at a compound annual growth rate (CAGR) of 10.5 per cent to roughly ~20 trillion in FY20, it added.