Western Carriers (India) IPO Good or Bad - Detailed Review

Western Carriers is kicking off its initial public offering which will be open from September 13, 2024 to September 18, 2024. While considering applying for this IPO, certain questions may arise in your mind, some of which include whether Western Carriers IPO is good or bad, whether it is worth investing in this IPO, and so on. 

In this article, we'll provide a comprehensive Western Carriers IPO review, diving into its business operations and fundamental analysis to help you make a well-informed investment decision.

Western Carriers IPO - Company Overview

Western Carriers (India) Ltd. (WCIL) is India’s largest private, multi-modal, rail-focused, 4PL asset-light logistics provider in terms of container volumes handled by private players in Fiscal 2023. It operates on a scalable, asset-light model, offering tailored 3PL and 4PL solutions. 

The company specializes in addressing complex logistics needs by creating customized, end-to-end, and integrated solutions for its clients, incorporating a wide range of value-added services across the supply chain. Its logistics solutions are engineered to create optimized, customer-specific supply chains designed to meet distinct operational goals. 

By working closely with trusted third-party service providers, the company maintains control over key assets like vehicles, warehouses, and railway equipment, ensuring smooth and efficient scheduling, routing, and delivery. 

It has built long-standing relationships with clients across various sectors, including metals, FMCG, pharmaceuticals, chemicals, engineering, oil and gas, and retail. The following table shows you the key customers of Western carriers from different segments:

In Fiscal 2024, 80% of its revenue was generated from clients who had been with the company for over three years, reflecting its ability to build strong, lasting relationships through consistent and customized services. The company also retained 100% of its top 10 customers, highlighting their continued trust and satisfaction.

Western Carriers IPO - Financial Overview

The following table shows you the key financial details of Western Carriers for three financial years:

If we take a look at the financials of Western Carriers, we can see that the company has increased its revenue, from Rs.1,470.88 crores in FY22 to Rs.1,685.77 crores in FY24. However, the growth rate of the company’s revenue has declined drastically every and was recorded at 3.23% in FY24.

On the other hand, its profits have increased from Rs.61.13 crores in FY22 to Rs.80.35 crores in FY24. However, the profit margins retained by the company over the past three years are floating around 4% as the company incurs huge operational costs due to its asset-light business.

For FY24, the ROE and RoCE were reported at 22.41% and 29.23%, respectively. This suggests that the company has given good returns to the shareholder's capital and has efficiently utilized its overall resources. 

Furthermore, the debt-equity ratio of the company during FY24 stood at 0.67 which suggests that the company majorly uses its own funds to run its business. However, the working capital days of the company have increased in the past three years. During FY24, the working capital days was reported at 96 days, suggesting that the company is taking longer to convert its working capital into revenue.

Western Carriers IPO - Industry Overview 

The logistics sector plays a pivotal role in driving India towards the government's goal of becoming a U.S. $5 trillion economy by 2025. Its robust growth is fueled by increased public infrastructure investment through initiatives like the National Logistics Policy (NLP), Dedicated Freight Corridors (DFCs), and the Gati Shakti Master Plan, which aims to lower logistics costs to 7%-8% of GDP. Key demand drivers include rising domestic manufacturing and consumption, growing MSME activity backed by initiatives like 'Aatmanirbhar Bharat' and 'Make in India,' and the increasing adoption of integrated fulfillment services and digitized supply chains.

Western Carriers IPO - Peer Comparison

The following table gives you a comparison of Western Carriers with its industry peers as of FY24:

Based on the above table we can see that Western Carriers Limited, with Rs.1,685.77 crores in revenue, is smaller than peers like Container Corporation and Mahindra Logistics. However, it shows strong profitability with an EPS of Rs.10.21 and RoNW of 20.17% indicating efficient use of its equity and outperforming Container Corporation’s RoNW of 10.42%. 

On the other hand, Mahindra Logistics, despite having higher revenue, faces financial struggles with negative EPS and RoNW. 

TCI Express, despite having the lowest revenue in the list, demonstrates higher earnings efficiency and superior shareholder returns as of FY24, making it a better overall performer in comparison.

Western Carriers IPO Details

Western Carriers IPO Date

Western Carriers IPO is open to subscription from September 13, 2024, to September 18, 2024. The shares will be allocated to investors on September 19, 2024, and the company will be listed in the NSE and BSE on September 23, 2024

Western Carriers IPO Issue Price

Western Carriers is offering its shares in the price band of Rs.163 to Rs.172 apiece. This means you would require an investment of Rs.14,964 per lot (87 shares) if you are bidding for the IPO at the upper price band.

Western Carriers IPO Size

The company is offering 28,655,813 shares, amounting to Rs.492.88 Crores. Out of these, 23,255,813 shares worth Rs.400 Crores are offered through a fresh issue, and 5,400,000 shares worth Rs.92.88 Crores are offered through an offer for sale.

Western Carriers IPO GMP

Many investors look at the Grey Market Premium (GMP) before applying for the Western Carriers IPO. The GMP gives an idea of market sentiment and can hint at the possible listing price, helping investors make more informed decisions

Western Carriers IPO Application Link

Open a free Demat account with Rupeezy today and enjoy a seamless experience when applying for the Western Carriers IPO. With an easy-to-use platform, Rupeezy makes the IPO application process quick and hassle-free. Click on the apply link below to get started.

Apply for Western Carriers IPO

Is Western Carriers IPO a Good or Bad Investment? Final Thoughts

Western Carriers IPO Review: Western Carriers' IPO presents an opportunity with strengths and potential risks. Its asset-light business model allows the company to expand without heavy investment in assets, and it has demonstrated strong financial performance, with a return on equity (RoE) of 22.41% and a return on capital employed (RoCE) of 29.23%. The company also benefits from long-term relationships with clients in various industries, contributing to revenue stability. 

However, the company relies on third-party vendors for key operations and depends on a few top clients for 80% of its revenue, which could pose risks. Investors should carefully weigh these factors when considering the IPO.

For those interested in investing in such IPOs, you can open a demat account with Rupeezy. Our trading platform allows you to participate in various investment opportunities including initial public offerings.