Apollo Tyres' Logistics Wing To Raise $100 Million From PEs

Apollo LogiSolutions (ALS) is all set to spread its wings across the country and is also aiming for acquisitions in near future. To fulfil these objectives, the subsidiary of Apollo International Limited (AIL) is planning to raise USD 100 million from its Private Equity (PE) investors by March 2017. The logistics company intends to either acquire two small companies or one large firm alongside will also invest some amount in IT solutions and tyre manufacturing space. Investment bank Edelweiss has been appointed by ALS to start the proceedings of the fund raising and meetings with the investors.

As per the Mr. Raaja Kanwar, ALS Vice Chairman and Managing Director, the company is going ahead with its plans of raising USD 100 million, out of the which, more than 50 percent of the amount will be utilised for acquisitions in the third party logistics segment and rest will be invested in domestic expansion. The domestic spreading out consists of the addition of two tyre production plants and funding of IT solutions business. Here the plans for setting up of two tyre manufacturing units is due to the expected ‘positive impact’ of Goods Service Tax (GST) and company’s foray into the liquid logistics market in the country.

Mr. Raaja Kanwar’s family is the promoter of Apollo Tyres and is registering profits together with only 0.5% of the revenues being captive from the group. Currently, his family is the owner of 90% ALS, whereas the remaining 10% of the share is held by the Royal Family of Abu Dhabi. According to Kanwar after the fund raising activity, the family will strip-off 10%-15% stake.

Established in the year 2009, ALS is a 90% subsidiary of Apollo International Ltd., and this year, it has acquired the controlling stake in a Chennai-based boutique Mobile Products and Solutions firm, Wifin Technologies (India) Pvt. Ltd.

He further stated that the company is mulling over for an IPO by the year 2019, which can provide the exit for any financial investor. He seemed confident on the institutional money in the domestic logistics space, while ALS has drawn a USD 200 million capex plan for the next three years.

Apollo LogiSolutions’ container freight stations or inland container stations are situated in Mumbai and Chennai. Moreover, it is also considering commencing of two more such stations at Kathupalli near Chennai and Tuticorin in the next few weeks. ALS has partnered with Germany-based Fiege Logistics firm allowing it to utilize best systems and global ties for the mutual good. Besides this, the Joint Venture (JV) has also leased out more than 1 million sq ft area as well.