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Cargosol Logistics Limited IPO

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About :

The 2003-founded Cargosol Logistics Limited is a full-service 3 PL (third-party logistics) service provider, offering end-to-end solutions in the logistics and supply chain domain. These solutions include container, sea, and air freight, transportation, warehousing, custom clearance services, and handling of project cargo.

Additionally, the business offers storage space to its clients. The warehouses are conveniently positioned near a number of Thane, Maharashtra, production and consuming areas.

Through our slot agreements with feeder operators as well as with mainline operators, the company also manages NVOCC (Non-Vessel Owning Common Carrier) facilities for the Indian Subcontinent, Middle East, Upper Gulf, South East Asia, and part of Europe.

The business has offices in Kalamboli, Pune, New Delhi, Chennai, and a warehouse in Thane in addition to its headquarters in Mumbai.

Customers of Cargosol Logistics Limited work in industries as diverse as automotive and heavy engineering, telecom, food and agro, fast-moving consumer goods (“FMCG”), paint, and dairy throughout India.

According to the restated financial statements, our total income for the three-month period ending December 31, 2021, the year ending on March 31, 2021, 2020, and 2019 was Rs. 135.17 crores, Rs. 103.59 crores, Rs. 64.12 crores, and Rs. 55.90 crores, respectively.

Details on IPO :

IPO for Cargosol Logistics begins on September 28, 2022, and ends on September 30, 2022. The IPO bid period for Cargosol Logistics runs from September 28, 2022, at 10:00 A.M., until September 30, 2022, at 5:00 P.M. On the day of the issue’s conclusion, at 5 PM, UPI Mandate confirmation must be received.

The number of shares in the Cargosol Logistics IPO lot is 4000. An individual retail investor may submit an application for up to 1 lot (4000 shares, or Rs. 112,000).

Objective of the Issue :

1. Purchasing a vehicle for business use.

2. Container purchases for the Non Vessel Owning Common Carrier (NVOCC) division’s growth.

3. To cover the need for working capital.

4. The overall corporate goal.

5. To cover issue expenses.

IPO Review:

  1. CLL is a provider of third-party logistics services.
  1. For FY22, it reported exceptional earnings.
  1. The issue seems reasonably priced based on the exceptional earning FY22 data.
  1. This market has promising future possibilities.
  1. Investors with excess cash may take a long-term view into consideration.

Financial Performance : 

In terms of financial performance, CLL reported turnover/net profits of Rs. 64.13 crore/Rs. 1.20 crore (FY20), Rs. 103.60 crore/Rs. 1.76 crore (FY21), and Rs. 200.72 crore/Rs. 5.54 crore (FY22) (FY22). Thus, both its top and bottom lines have seen substantial growth. In the year leading up to the IPO, the margins reported for FY22 look to be window dressing, which raises questions about their durability moving ahead.

CLL has reported average EPS of Rs. 5.29 and average RoNW of 28.78% during the past three fiscal years. The issue is priced at a P/BV of 1.21 based on the post-IPO NAV of Rs. 23.10 per share and a P/BV of 1.31 based on the NAV of Rs. 21.33 as of March 31, 2022.

Dividend Policy :

In accordance with the disclosed periods in the offer document, the company has neither declared or paid any dividends. Following the IPO, it will implement a conservative dividend policy based on its financial performance and prospects for the future.

Conclusion :

The industry in which CLL competes is intense. The issue appears to be competitively priced based on FY22 super earnings. Concerns are raised by higher IPO spending. Cash surplus investors may think about investing for the long term given the segment’s promising future.

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