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    IPO to value M&M Logistics arm at Rs 3,000 crore

    Synopsis

    The subsidiary of the diversified conglomerate Mahindra & Mahindra had reported a profit after tax of Rs 60 crore for 2016-17.

    ET Bureau
    Mahindra Logistics is aiming for a valuation of Rs 3,000 crore, which is 50 times its latest annual profit, in its maiden public share sale planned for next week.

    The subsidiary of the diversified conglomerate Mahindra & Mahindra had reported a profit after tax of Rs 60 crore for 2016-17.

    The company has fixed the price band at Rs 425-429 per share for its initial public offering, which is slated to open on October 31 and close on November 2.

    A discount of Rs 42 per share will be offered to its eligible employees, the company said in its filing. It plans to raise up to Rs 829.36 crore at the upper end of the price band.

    M&M and PE investor Kedaara Capital Investment Managers will each offload 13.5 per cent of their holding in the offer for sale. M&M will be left with 60 per cent share and Kedaara Capital Investment Managers with 9.5 per cent, while the employees would hold 3.5 per cent in the form of ESOPS and the rest would be with the public.

    “We met more than 100 prospective investors and then we came up with a price that was recommended by them,“ said CEO Pirojshaw Sarkari. “The size of the industry is so large and it's still at a formative stage. There are very few serious players and it's very unorganised. So someone who can come in and shape the industry should be the one to take it forward.That's why the investors were ready for this price.“

    Mahindra Logistics' net profit grew 50 per cent in 2016-17 over the previous year. Its revenue grew 30 per cent to Rs 2,666.6 crore during this period.

    The company's e-commerce revenue more than quadrupled in two years to Rs 212.7 crore.



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