VRL Logistics to raise funds for fleet expansion

Surface logistics and parcel delivery service provider VRL Logistics Ltd is going public on April 15 through the book building process to raise funds to finance its fleet expansion and widen its network, a top company official said on Friday.

"From the fresh issue of equity shares, aggregating to Rs.1,170 crore (net proceedings), we will invest Rs.67 crore to acquire about 250 trucks and Rs.28 crore for repayment of debts partly," VRL Logistics promoter chairman Vijay Sankeshwar said.

Based at Hubballi in north Karnataka, the over three-decades-old VRL has the largest fleet (3,546) of commercial vehicles in the private sector and operates across the country through a network in 28 states and four union territories.

The company is also making offer for sale up to 17.12 million equity shares held by NSR-PE (private equity) Mauritius LLC, Sankeshwar and his son Anand Sankeshwar.

"The fresh issue and offer for sale issue will be 25 percent of the company's diluted post-issue paid-up capital. For every share of Rs.10 face value, the price band is Rs.195-205," VRL chief financial officer Sunil Nalavadi told reporters here.

The company hopes to raise Rs.452-468 crore from both the public issue, with 50 percent of it through institutional buyers and the balance through mutual funds and retail investors.

"We operate through a hub-and-spoke operating model, which enables us to transport goods and provide customers with access to multiple destinations for booking and delivery of goods," Sankeshwar said.

The company also operates luxury bus services across southern and western states, including Maharashtra, Gujarat and Rajasthan.

"By owning the fleet, we are able to reduce dependence on hired vehicles, retain control of the value chain, service quality and ensure timely delivery of goods," Nalavadi said.

The company also operates carriers to transport cars and liquids, besides fast-moving consumer goods, food, textiles, apparel, furniture, appliances, pharma products, rubber, plastics, metal products, wood, glass, automotive parts and machinery.

The anchor investor bid will be on April 13 and the issue will close on April 17.

"We have kept the minimum bid lot at 65 equity shares and in its multiples thereof," Nalavadi added.