JM Baxi Ports' Rs 2,500 crore IPO hangs fire amid promoter family feud

The ports and logistics major was in the process of filing DRHP last year

A feud in the promoter family of JM Baxi Ports and Logistics has disrupted the company’s proposed Rs 2,500-crore initial public offering (IPO), according to people in the know.

The company had laid the groundwork for filing its draft red herring prospectus (DRHP) last year, but it remains unclear when it will be able to present its listing plan to the market regulator, the sources said.

A detailed questionnaire sent to the company didn’t elicit any response. 

Vir Kotak, a promoter of JM Baxi Group, recently sought intervention from the Bombay High Court in the acquisition of a stake in JM Baxi Ports & Logistics by German shipping giant Hapag-Lloyd.

Kotak has listed the firm, his father Krishna Kotak, brother Dhruv Kotak, HL Terminal Holding (a subsidiary of Hapag-Lloyd), and two company directors -- Rolf Eric Habben Jansen and Dheeraj Bhatia -- as respondents, according to information on the court’s website.

An earlier news report, citing sources, stated that Singapore-based Vir Kotak alleges that the deal with Hapag Lloyd, which involves his shares, was initiated without his consent, which leads to alienation of his rights. 

The hearing has begun, with Justice Shriram Modak of the Bombay High Court allowing respondents to file their replies and adjourning the case until November 8.

Investment bankers and corporate lawyers warn that any unresolved issues, especially those involving a company's equity, could potentially derail IPO plans by making potential investors hesitant.

 JM Baxi, an over 100-year-old group, is India's leading maritime and logistics firm. The promoter Krishna Kotak family owns around 60 per cent stake in JM Baxi Ports & Logistics (formerly known as International Cargo Terminals and Infrastructure), which is the group's flagship unit.

In January, a wholly-owned subsidiary of Hapag Lloyd signed a binding agreement to acquire 35 per cent of JM Baxi Ports & Logistics from private equity giant Bain Capital. The German major also signed a binding agreement with the company and its promoters -- the Kotak family -- for additional share purchases through a capital increase exercise.

The IPO of JM Baxi Ports & Logistics was planned to raise fresh capital for debt repayment, business expansion, and potential acquisitions.