Logistics service and solutions provider Seaways Shipping & Logistics has filed draft red herring prospectus (DRHP) with capital markets regulator SEBI for its initial public offering (IPO).
The IPO comprises of fresh issue of shares worth INR80 crore and an offer for sale (OFS) by existing investors of up to 64.45 lakh shares. Seaways Shipping & Logistics counts IDFC Private Equity among its existing shareholders. The IPO will also involve a reservation of up to four lakh shares for eligible employees. The issue will be managed by ICICI Securities, IDFC Bank and Karvy Investor Services. Shares of Seaways Shipping & Logistics are proposed to be listed on BSE and NSE.
By investing INR120 crore in the company in 2008, IDFC PE owns nearly 24% equity stake in Seaways Shipping & Logistics. IDFC is looking to offload its complete shareholding of 51.56 lakh shares through the IPO, according to the prospectus.
Proceeds of the fresh issue would be utilized for capital expenditure, repayment of loans and for other general corporate purposes. Out of the total INR80 crore, the company plans to invest INR45.48 crore in capital expenditure while another INR17 crore are scheduled to go towards repayment/pre-payment of debt. Majority of the capital expenditure will go towards Bulk Cargo, Non-Vessel Operating Common Carrier (NVOCC), and Freight Forwarding business lines.
Seaways Shipping & Logistics has been consistent with growing top line. From INR507.1 crore in FY2011, the company’s revenues grew to INR716.5 crore in FY2015. However, profitability has not kept pace with revenue growth and the track record has been patchy. For the fiscal year ended March 2015, the company recorded profit after tax of INR29.24 crore which is up from previous year but the company has booked losses in the preceding three years.
For the six months ended September 2015, the company posted revenue of INR323.9 crore but its profits stood at just INR4.5 crore.