Future Supply Chain Solutions Ltd. made its stock market debut at a premium after raising Rs 650-crore in its initial public offering.
The stock opened 1.51 percent higher at Rs 674 per share on the BSE Ltd. compared to the issue price of Rs 664 apiece. The stock rose as much as 4.82 percent to Rs 696 thereafter when most equity benchmarks registered their worst intraday losses of the year as counting for Gujarat and Himachal Pradesh assembly election results was underway.
Promoter Future Enterprises Ltd. and private investor Griffin partners sold 98 lakh equity shares in the offer that was subscribed 7.56 times.
.png)
Qualified institutional buyers and high net worth individuals put in bids for 12.36 and 11.15 times the shares on offer, respectively. The portion reserved for retail buyers was subscribed 3.28 times. At the issue price, Future Supply Chain will command a market capitalisation of close to Rs 2,660 crore, according to BloombergQuint's calculations.
Business
Future Supply Chain is one of India's largest third-party logistics solution provider, according to the Kishore Biyani-led company's red herring prospectus. It follows an asset light business model in which assets necessary for operations, such as vehicles and warehouses, are leased.
The company has presence in three business segments – contract, express and temperature controlled logistics.
Almost 70 percent of Future Supply Chain's comes from group companies.
Financial Highlights
Net worth stood at Rs 326 crore for the half-year ended September 2017 translating into a book value per share of Rs 81.
Revenue grew at a compounded annual growth rate of 17 percent and net profit rose at 36 percent over FY15-17.
Earnings before interest, tax and depreciation and amortisation margin has been ranged between 13-15 percent in the last three years.
The company not declared any dividend during the last five financial years.
Peers Comparison
The recently listed Mahindra Logistics Ltd. has the same business model and asset structure like Future Supply, but the later generates nearly one-fifth revenue of Mahindra Logistics. On the other hand, TCI Express Ltd. is purely into express logistics business, but does follow asset light business model.
Future Supply's return ratios are a mixed bag as the company outperforms on few parameters, but lags in other.
On the balance sheet, Future Supply had a cash balance of more than Rs 80 crore as of September 30, 2017 and very low negligible debt on the books.
Earnings per share on an annualised basis for financial year 2018 comes to Rs 16.64 and at the upper end of the price band, price-to-earnings ratio stands at 40 times, according to BloombergQuint's calculations.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
