New Veron buys 6% in Mumbai logistics firm for Rs 60 cr

New Jersey-based institutional investor New Vernon has picked up 6 per cent stake in Allcargo Movers (India) for Rs 60 crore, putting the valuation of the Mumbai-based logistics company over three times its annual sales.

Allcargo Movers Chairman and Managing Director Shashi Kiran Shetty confirmed the development. He said the foreign fund acquired the stake in the Rs 315 crore company last week. The US investor operates in India two funds, of which one invests in listed securities and the other in private equity.

Allcargo Movers is a leading multi-modal logistics services provider and the largest non-vessel owning common carrier (NVOCC).

It offers cargo consolidation, terminal handling, container freight station services, handling of over dimensional cargo, container transportation logistics and equipment leasing.

Industry sources said one major domestic fund might follow New Venron's steps shortly. They added that a New York-based fund was almost ready to pick up a sizeable chunk. But the deal did not materialise owing to valuation differences.

Shetty, however, said the company is not considering further dilution of promoters' holding.

According to industry sources, the stake acquisition by New Vernon might be a precursor to the company's initial public offering. In which case, the valuation would be the benchmark for the pricing. However, Shetty remained non-committal on this.

In a parallel development, Allcargo has decided to raise its stake in Belgium-based container freight station company ECU Hold NV to 49.9 per cent from 33.8 per cent, Shetty said. The ¤180 million (approximately Rs 972 crore) ECU Hold NV, Europe's largest NVOCC, has been Allcargo's agent across the world for the past 10 years.

Shetty, however, declined to comment on the size of the deal on grounds of confidentiality agreement. Earlier, with the acquisition of 33.8 per cent, Shetty was appointed as vice-chairman on the ECU Hold board.

Allcargo Movers will have two directors on the board and will have the right to nominate the chief financial officer.

ECU Hold owns and operates warehouses/container freight stations in Antwerp, Dubai, Hong Kong, Italy, Brazil, France and many other countries. ECU Hold has 150 offices across Europe, Latin America, North America, Africa, Far East, the Middle-East, Pacific and the Indian subcontinent.