Western Carriers IPO subscribed by 10 times so far on day 4, GMP down to 29%. Check details

The portion reserved for the retail investors as well as the NIIs received a solid response and was booked a little over 14 times so far around 10:30 am today.

The quota reserved for qualified institutional buyers (QIBs) was booked by just 10%. In all, 5.91 lakh share bids were received from QIBs around this time against 58,98,528 shares available for booking.

The IPO comprises a fresh equity sale of Rs 400 crore and an offer for sale (OFS) of up to 54 lakh shares by promoter selling shareholder Rajendra Sethia.

Western Carriers IPO price band

The company has fixed a price band of Rs 163-172 per share, where investors can bid for 87 shares in one lot.

Western Carriers IPO GMP

In the unlisted market, the company’s shares were commanding a grey market premium of Rs 50 per equity share, down from Rs 58 on the previous day. This indicates a 29% premium over the upper band of the issue price.

Western Carriers IPO review

Analysts advised only high risk investors to subscribe to the issue as the company faces a long payment cycle and is exposed to several operational risks.

“Given the company’s financial challenges and limited market interest, a “may apply” rating is recommended for long-term investors with a high-risk tolerance,” said Swastika Investmart.

“At a higher price band, WCIL is demanding a EV/Sales multiple of 1x, which is at discount to peer average of 2.4x. Thus, the issue is attractively priced. Considering its market position among the private players and improving outlook of rail logistics post partial/full commencement of DFCs, we believe it is well positioned to benefit from the expansion in the multi-modal freight transportation,” said analysts at Choice Broking.

Other details

Proceeds from the fresh issue will be used to repay borrowings, fund capital expenditure towards the purchase of commercial vehicles, containers, and reach stackers, with the remainder allocated for general corporate purposes. Western Carriers has a pan-India presence through over 50 branch offices and four zonal offices across 23 states in India.

The company’s 16 warehouses are located across 12 states, and it operates at over 55 major public rake handling points spread across India.

Its pan-India presence allows it to provide both first-mile and last-mile connectivity to customers who have operations across India, including in remote areas.

As of March 31, 2024, the company had a customer base of 1,647 across industries like metals, FMCG, pharmaceuticals, chemicals, and oil & gas. Key clients include Tata Steel, Hindalco Industries, HUL, and DHL.

The company’s consolidated revenue from operations increased 4% to Rs 1,686 crore for FY24. Profit after tax rose 12% to Rs 80.3 in the same period.

For Fiscal 2024, the company reported revenue of Rs 1,685 crore and a PAT of Rs 80 crore. JM Financial and Kotak Mahindra Capital Company are the book-running lead managers for the IPO. The equity shares will be listed on BSE and NSE.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)