Indian logistics provider CJ Darcl Logistics Ltd. plans to perform an initial public offering (IPO), which includes ₹340 crore in new shares and an Offer for Sale (OFS) for shares by promoters.
A filing with the Securities and Exchange Board of India (SEBI) showed that the company will use the proceeds from the fresh equity shares to repay its debt. On a consolidated basis, CJ Darcl’s debt stood at ₹804 crore as of July 2023.
The India-based logistics firm also intends to raise ₹68 crore in a pre-IPO funding round, with the money being allotted to capital expenses, including the acquisition of electric vehicles (EVs).
Financial institutions, including ICICI Securities, AXIS Capital Holdings Ltd., and Mirae Asset Capital Markets, will oversee CJ Darcl’s public listing and ensure regulatory compliance.
The company’s client portfolio comprises well-known firms such as Tata Steel Ltd., Reliance Industries Ltd., and ArcelorMittal Nippon Steel India Ltd. With such a solid customer base, industry spectators are seeing substantial potential for the IPO.
Still, investors’ response to the company’s public listing has yet to be known, considering conditions in the market and CJ Darcl’s financials.
Logistics Space’s Pursuit of Funding and Interests
CJ Darcl’s move to prepare for an IPO comes at a time when a larger trend of logistics firms is attempting to raise funds in pursuit of more operational growth and new tech investments.
Logistics have been left out of the venture until the COVID-19 pandemic. Increased e-commerce habits led to supply chain congestion in the first two years of the pandemic.
The issue pushed investors to focus on new opportunities that could use existing technologies, such as cloud computing, predictive analytics, and artificial intelligence (AI), to bolster the logistics space.
Funding in the segment came in quickly in 2021. Data from a US-based business information provider showed that investment into the space reached more than $21 billion in the year. However, investments in logistics startups fell 48% year-on-year in 2022 to $11 billion.
