“We are aiming to raise USD 100 million from private equity investors by March. Over half of the money will be used for acquisitions in the third party logistics space,” ALS Vice-Chairman and MD Raaja Kanwar told PTI here.
He said the company has already identified possible acquisition opportunities, adding that it may include one big player or two small firms.
ALS has appointed investment bank Edelweiss for the fundraising and aims to start meetings with the investors soon.
The company, which had revenue of Rs 900 crore with a pre-tax margin of 8 percent in 2015-16, will use the rest of the funds for IT solutions, adding two facilities with an eye on the positive impact of GST and entering the liquid logistics space, he said.
Kanwar, whose family is the promoter of Apollo Tyres, said ALS is reporting profits and only 0.5 percent of the revenues are captive from the group.
At present, the family owns 90 percent of ALS, with the rest with being held by the royal family of Abu Dhabi.
Kanwar said his family will dilute up to 75 per cent stake through the fund raising exercise.
Asked if this means he is aiming for an enterprise valuation upwards of USD 800 million for the 2009-incorporated company, Kanwar declined to comment.
He said the company is looking for an IPO by 2019, which can provide the exit for any financial investor.
Stating that there is ample interest in institutional money in the domestic logistics space, Kanwar said ASL has drawn a USD 200 million capex plan for the next three years.
It will be split equally between the USD 100 million private equity infusion and bank loans, he said.
At present, it has container freight stations or inland container depots at Panvel near Mumbai and Chennai, and is planning to open two more at Kathupalli near Chennai and Tuticorin over the next few weeks, he said.
It is also looking at Mundra on the West coast and one more facility on the East Coast for its expansion, he said, adding that some money will also be ploughed into having warehousing facilities in Gujarat.
Till now, a total of USD 100 million has been invested in the venture, including an equity component of USD 50 million by the family, he said.
Kanwar said ALS is not keen to serve the burgeoning e-commerce space with last-mile offerings because of the cash burn which can happen and is happy serving the B2B clientele.
It has a JV with German Fiege Logistics which gives it access to best systems and global ties, he said, adding the JV has leased out over 1 million sq ft space as well.