four s fortnightly logistics track 14th february - 27th febriary 2012

FOUR-S Consumer (Soft) Track

s

News of the week 1

Investment Activity 2

News Update 3

Event Update

4

Global News Update 5

Stock Market Updates 7

Peer Benchmarking

8

About Four-S Services 9

Infrastructure Fund Of India Exits Logistics Firm Gati Infrastructure Fund of India LLC, a private equity fund managed by AMP Capital Investors, exited its investment in logistics services provider Gati Ltd by selling nearly 6% stake through the open market earlier this month. The stake was sold for an amount between ` 170mn and ` 210mn, according to estimates. AMP Capital invested in Gati in 2006, acquiring 12% stake for $15mn or ` 664mn. It also picked up additional stake from the markets in 2009. Loss-making Gati Ships, owns four container vessels, fetching a valuation of close to ` 2bn according to industry analysts. Bernard Schulte, which manages a fleet size of more than 650 vessels, operates in 25 countries. … in talks to sell stake in shipping arm to Bernhard Schulte Hyderabad-based logistics major Gati is in talks with German ship-management company Bernhard Schulte to sell a strategic stake in its loss-making shipping business to raise cash to tide over the financial crisis. Bernhard Schulte will acquire significant stake in Gati's demerged shipping business, Gati Ships, helping it to charter container vessels to capitalise on the growing cargo trade emerging out of India. Founded in 1989, Gati has more than 3500 employees covering 622 out of the 626 districts in India. It has over 4,500 vehicles on the road, excluding its fleet of refrigerated vehicles, container shipping vessels and world class warehousing facilities across India.

14th

Feb‘12 –27th

Feb‘12

Fortnightly Update on Indian Logistics Industry

LOGISTICS TRACK

News of the week Content

Research Desk

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Four-S India Logistics Report – 2012 Four-S is launching comprehensive report on

Logistics Space. The report presents current industry

trends and snapshot of all key segments in Logistics

& Supply Chain Industry along with profiles of

interesting listed and unlisted players in the space.

The report is useful for Board members & Senior

Management of Logistics companies, PE Fund

Managers and other investors. To book your copy,

please write to Seema Shukla at [email protected].

mailto:[email protected]

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Four-S Logistics Track

Investment Activity

Source: Four-S Database

Mergers & Acquisitions in 2012

PE Deals in 2011

Date Investor Target Stake (%)Amount

($ mn)Strategy

6-Jan India Equity Partners Foursee Infrastructure Equipments Ltd. NA 10.0 Growth

23-Mar Infrastructure India Holdings Fund LLC Aegis Logistics 6.4 15.1 PIPE

11-Apr Warburg Pincus Continental Warehousing Corporation NA 100.0 Late

22-Apr Fidelity Growth Partners Transpole Logistics NA 13.5 Growth

5-May Mumbai Angels MVS Efarms 25 NA Early

24-Jun IL&FS PE JICS Logistics NA 8.8 Growth

4-Jul Rajasthan VC Fund Leeway Logistics NA 3.3 Early

5-Jul Standard Chartered PE Redington India 10.0 81.1 PIPE

5-Jul ECL Finance Ltd. Redington India 2.0 16.2 PIPE

19-Aug Ascent Capital Karaikal Port NA 30.0 Growth

13-Dec India Equity Partners TNT Express NA NA Buyout

PE Deals in 2012

Mergers & Acquisitions in 2011


($ mn)Business

1-Feb Oil Field Warehousing & Services (OWS) Raamns Shipping & Logistics NA NA Logistics Services


($ mn)Business

19-Jan TVS Logistics MESCO (US) 100 NA Logistics Services

16-Feb Infrastructure India Plc Vikram Logistics & Maritime Services 37.39 NA Tranportation

26-Apr Aqua Logistics Ltd Nikkos Logistics 70 NA Logistics Services

29-Apr SBS Holdings Atlas Logistics 80 33.3 Logistics Services

12-Jul Royal Vopak CRL Terminals 100 61.8 Liquid Storage

31-Oct Vikram Logistics ETA Engineering and its sub. Freightstar NA 14.4 Multimodal Logistics

12-Dec IL&FS Transportation Networks Ltd. Chongqing Yuhe Expressway Co Ltd. 49 NA Road Transport Infra

14-Dec Future Supply Chain Solutions Transmart India NA NA Warehousing

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($ mn)Strategy

6-Jan General Atlantic Foursee Infrastructure Equipments Ltd. NA 20.8 Growth

23-Feb IDFC PE StarAgri Warehousing & Collateral Management NA 30.0 Growth

23-Feb Global Super Angels Chhotu.in (Santa Claus Couriers Pvt Ltd) NA NA Angel




News Update

Logistics Company Chhotu.in Raises Funding From Global Super Angels Santa Claus Couriers which operates the e-commerce logistics company Chhotu.in, has raised an undisclosed amount of funding from Global Super Angels. The company intends to use the money raised to expand its operations to more cities and hire more people. Started in Jan 2011, Chhotu.in is a Delhi-based online logistics company which provides last mile logistics for various e-commerce companies including HealthKart, LensKart, Zovi, UrbanTouch, Fashion And You, 99labels.com, Myntra and Healthcar.com. It also provides other services like reverse logistics, Cash On Delivery and offline payment collection. The company claims to be handling around 800 transactions on a daily basis, with a monthly transaction size ranging from ` 7.5mn to ` 10mn. It currently has more than 100 employees on board. AllCargo Logistics begins corporate recast AllCargo Logistics Ltd has set in motion a corporate restructuring move aimed at de-merging its Indian and global businesses into two separate entities, each getting a true reflection of the business and standing in the market. The de-merger, which may take four to five months to take shape, will see the parent company retain its listing in India and the new entity, which will handle the global less-than-container-load (LCL) operations, get a new listing either in India or overseas, but headquartered in India (Mumbai). The company spread wings globally after it acquired European firm, ECU Line, in 2006, making it the second largest NVOCC (non-vessel owning common carrier) in the world. Essentially, the de-merger will re-shape the ECU arm into a new entity. This business currently handles a throughput of 3.5mn cubic metres, with 160 offices sprinkled across 60 countries and one transhipment hub in each continent. It has 85 smaller LCL companies that AllCargo acquired over the years. Adani Group to consolidate under three verticals: resources, logistics and energy Gujarat based diversified infrastructure player Adani Group is consolidating businesses under three verticals as it seeks to gain a leaner structure to pursue global ambitions better. According to Gautam Adani chairman of Adani Group, which has grown to $6 bn size in the last 24 years the company needs to integrate by specifically laying out core areas of focus. The company would be bringing all its businesses under three main verticals or clusters: resources, logistics and energy. While under resources, the group will house its coal mining and oil & gas operations; under logistics it will have -

- activities such as development of ports, logistic hubs and special economic zones. The third cluster will include its business of power generation and transmission. TVS Logistics to sell motor factor TVS Logistics, the parts warehousing and logistics business owned by the TVS Group of India, has agreed the sale of its Globe Transport Products. Globe is a commercial vehicle motor factor specialising in truck parts and components and was launched in 2002 with a single branch in Oswestry. The business was purchased from its management by the Multipart Group in 2009, and has since expanded with seven branches located in Oswestry, Crick, Cardiff, Warrington, Birmingham, Sheffield and Avonmouth. Globe is being purchased by TVS Europe’s former chief executive, Chris Gateley. Gateley led the buyout of Multipart Group, including Globe, from the Imperial Group and subsequently oversaw its acquisition by TVS in 2010. He stood down from his TVS role during 2011 and has since then been assisting the organisation with its European development plans. Aegis Logistics looks at doubling Pipavav port investment Aegis Logistics, a gas and liquid fuel logistics concern has plans to increase its proposed investment in Gujarat Pipavav Port. The company had delineated an investment of ` 4 bn in 2010 which it plans to enhance to ` 10 bn, driven by the growth potential in the port. The investment entails setting up of a tankage facility at the port that would span across a period of 3-4 years. Capital expenditure by Aegis for the year 2013 would be segregated into ` 650 mn at Haldia and ` 1.25 bn at Pipavav for liquid facilities and another ` 250 mn for LPG facilities. The second part of the capex would be devoted to Phase II and III of Pipavav for its LPG facilities. In 2010, Aegis had announced to develop 600,000 kilolitre (kl) oil terminal complex at an investment of ` 4 bn. It had entered into a sublease deal with the operator of the port, APM Terminals Pipavav, to set up a global oil and petrochemical storage complex across 100 acre of land. This 100 acre storage complex combined with potential of bigger ships calling at Pipavav port due to deeper draft given opportunity to enhance tankage facility for Aegis. Shipping Ministry Signs MoU with Ennore Port Limited A Memorandum of Understanding (MoU) setting out the performance targets for 2012-13 for Ennore Port was signed between the Ministry of Shipping and Ennore Port Limited (EPL). The MoU for 2012-13 has enhanced physical and financial targets for the company. The Cargo throughput targ-

Research Desk





-et has been set at 16 mn Tonnes and gross sales have been put at ` 2.1bn for Excellent Grade. Having a paid up equity of ` 3bn, against the authorized capital of ` 5bn, Ennore Port has been consistently a profit making company and has paid a dividend of ` 74.1mn crores to the Government of India and ` 37.1mn to Chennai Port Trust, who are its shareholders, for the year 2010-11. Essar Shipping inducts new mini cape vessel The Ruias-owned Essar Shipping inducted its second mini-cape vessel, as part of its on-going $1bn ship acquisition programme in the next two years. The new vessel is the second in the series of mini-cape bulk carriers that are being built for the company at STX Dalian shipyard — the remaining four will join the Essar fleet in the next four months. This relatively new category of vessels, which is in between a cape size and supramax size ship, can be berthed at ports having relatively shallower drafts of about 13.7 metres, but with a higher cargo carrying capacity. Four Soft bags new deal from Flowerport Logistics Four Soft has announced that it has signed significant deal with Flowerport Logistics, a leading Netherlands based logistics solutions provider. As per the deal, Four Soft would offer its integrated freight forwarding solution, 4S eTrans SME. The contract was executed through Four Soft Netherlands BV, Dordrecht, a subsidiary of Four Soft, India.

SITL 2012: Indian ports should be run like corporate entities A delegation of transport and logistics industry veterans was in Mumbai for SITL 2012. It was a three-day interactive session-cum-seminar for the aforementioned industry during 23rd Feb to 25th Feb. According to European delegates, India has a long coastline and a number of ports, but they will become a lot busier and be able to match up to international standards only when the port authorities and the Ministry of Shipping start running them like corporate entities and not as mere infrastructure facilities. The semi-privatisation of ports has been taking place in Europe for a couple of decades now. This is what India could learn from European experience. The concerned ministry and the private sector should meet and work out the modalities for public-private partnership in the port sector. According to the knowledge partner KPMG, India is an emerging logistics market with current size of $84bn which is estimated to touch $112bn in 2014.

Global News Update

Research Desk


Shipping group Moller-Maersk sees 2011 profit slide, grim outlook Denmark’s A.P. Moller-Maersk A/S, the world’s largest container carrier announced that that full-year profits fell 36% due to lower rates, particularly on Asia-Europe routes, and warned the outlook was grim. The earnings dropped 36% to 18.1 bn kroner ($3.3bn), despite a 2% rise in revenue to 322 bn kroner, as lower freight rates offset the impact of higher container volumes. A.P. Moller-Maersk’s subsidiary Maersk Line is the world’s largest container carrier with a fleet of more than 500 vessels. Kerry Logistics obtains Spanish joint venture Kerry Logistics has completed its acquisition of Kerry Salvat Logistics S.A., its former Spanish joint venture. The Hong-Kong based 3PL procured the remaining shares of the firm from partner Salvat Logistica, S.A.. Terms of the deal were not disclosed. Spain has been a key market for Kerry Logistics since 2005. In addition to forwarding significant freight volumes between Spain and Asia, Kerry has provided its Spanish customers with the means to sell their goods in Asia.

Business of Sprint Logistics Acquired by Aperion Management Aperion Management, a New York-based middle-market private equity firm, has acquired the municipal solid waste transfer station management and transportation business of Sprint Logistics for an undisclosed amount. Established in 1992, Sprint Logistics is a provider of transfer station management and transportation services in the Houston, Texas market. The company will be rebranded Stella Environmental Services. Roadrunner Transportation Systems acquires Capital Transportation Logistics Roadrunner Transportation Systems acquired all of the outstanding capital stock of Capital Transportation Logistics, located in Nashua, N.H. The purchase price of $6.25 mn was financed with borrowings under Roadrunner's credit facility. CTL is a non-asset based TMS provider offering primarily transportation management solutions on less-than-truckload freight, in addition to truckload brokerage and freight




Research Desk


-ght bill audit and payment services. CTL uses a Web-based system that allows clients to optimize carrier selection, dispatch and track shipments, generate invoices, create custom reports, and perform improvement analysis. Both are the US based companies inolved into supply chain management. In 2011, CTL generated net revenues of approximately $6 mn. Panalpina Appoints New CFO And Regional CEO Americas Panalpina announced two key executive hires. Robert Erni (45) is to become the new Chief Financial Officer of the Group. Ferdinand Kurt (59) is to become the new regional CEO for the Americas. Both have an extensive track record in the freight forwarding and logistics industry. Cold chain logistics company CryoPort secures $5m private placement US cold chain logistics company CryoPort has closed a private placement with various investors for $5m.




As on 24th February 2012 Market Cap Price

(In ` mn) (In `) 1W 1M 3M 6M 12M

Container Corporation of India 129,801 998.60 2.2% 11.1% 9.1% 6.6% -8.6%

Blue Dart 45,139 1,902.35 7.5% 12.2% 29.3% 17.3% 90.7%

Great Eastern Shipping 36,062 236.80 -12.7% 3.3% 9.9% 0.7% -3.4%

Shipping Corporation of India 32,792 70.40 -8.6% 18.1% 20.0% -14.7% -29.4%

Essar Ports Ltd. 27,008 65.80 -5.9% 2.8% -5.7% -9.6% -

Allcargo Logistics 17,905 137.15 -3.6% -0.3% 11.9% -9.4% -3.5%

Gateway Distriparks 16,180 149.50 3.3% 15.0% 18.1% 14.4% 30.0%

Arshiya International 8,786 149.35 -7.9% 8.2% 2.7% 11.4% -19.2%

Mercator Ltd. 6,759 27.60 -11.1% 21.1% 30.2% 10.8% -19.8%

Aegis Logistics 5,513 165.05 -2.7% -1.7% 19.5% -10.9% -42.8%

Transport Corporation of India 4,941 67.95 -5.5% 3.6% 7.9% -14.5% -28.3%

Sical Logistics 3,812 68.55 -1.2% -0.5% -2.5% -4.6% -6.9%

Aqua Logistics 3,735 12.45 4.2% -0.4% -12.9% -12.0% -28.0%

SEAMEC Ltd. 3,143 92.70 -7.5% -0.3% -0.6% -7.0% -12.2%

Gati 3,104 35.85 -10.3% 4.5% 31.6% -37.1% -30.6%

Varun Shipping 2,873 19.15 -6.6% 3.8% 16.4% -3.5% -29.7%

NSE Nifty - 5,429.30 -2.4% 5.9% 14.2% 11.1% 3.2%

BSE Sensex - 17,605.82 2.0% 7.5% 9.4% 4.0% -6.0%

ET Logistics Index - 16,729.41 -0.3% 10.6% -1.3% -5.4% -7.8%

ET Shipping Index - 7,226.60 -6.3% 1.2% 13.7% 1.3% -3.4%

Baltic Dry Index (BDIY:IND) - 718.00 0.1% -11.0% -60.4% -55.2% -42.2%

Percentage Change (%)

Baltic Dry Index

Stock Market Update

Road Freight Index

Research Desk


Source: Transport Corporation of India

Source: Baltic Exchange




Results Update – Last Quarter Ended 31st December 2011

Results Update – Annual

All figures in ` mn

Note: Financial Year for Allcargo and Blue Dart is Jan-Dec and that for Gati is Jul-Jun Source: Company Websites, Four-S Research

FY'10 FY’11 YoY FY'10 FY’11 YoY FY'10 FY’11 YoY EBITDA NPM

CONCOR 37,057 38,266 3% 9,616 10,226 6% 7,867 8,301 6% 27% 22%

Shipping Corp. of Ind. 34,631 35,434 2% 4,690 7,098 51% 3,769 5,674 51% 20% 16%

Allcargo 26,329 28,613 9% 2,790 2,697 -3% 1,706 1,659 -3% 9% 6%

Mercator Lines 18,436 28,069 52% 6,619 6,166 -7% 532 468 -12% 22% 2%

GE Shipping 30,415 25,580 -16% 9,107 10,920 20% 5,128 4,732 -8% 43% 18%

TCI 15,224 18,527 22% 1,146 1,400 22% 413 501 21% 8% 3%

Aegis Logistics 3,057 18,121 493% 726 834 15% 430 471 9% 5% 3%

Blue Dart 9,097 11,507 26% 1,065 1,556 46% 612 947 55% 14% 8%

Varun Shipping 9,026 8,368 -7% 2,834 3,670 30% 126 147 17% 44% 2%

Arshiya 5,259 8,188 56% 891 1,598 79% 594 746 26% 20% 9%

Sical Logistics 7,260 7,711 6% 375 (1) - (357) (80) - - -

Gati 6,303 7,512 19% 615 859 40% (151) 151 - 11% 2%

Essar Ports 10,282 5,170 -50% 3,227 1,384 -57% 900 209 -77% 27% 4%

Patel Integrated 3,467 4,268 23% 117 143 23% 46 35 -24% 3% 1%

Aqua Logistics 3,220 3,810 18% 324 358 10% 205 224 9% 9% 6%

Gateway Distri. 1,670 1,915 15% 882 1,014 15% 772 848 10% 53% 44%

Shreyas Shipping 1,479 1,904 29% (2) 304 - (157) 128 - 16% 7%

SEAMEC Ltd 4,248 1,024 -76% 2,237 (544) - 2,039 (668) - - -

Company Revenue EBITDA PAT Margins FY’11

Research Desk


Q3 FY’11 Q3 FY’12 YoY Q3 FY’11 Q3 FY’12 YoY Q3 FY’11 Q3 FY’12 YoY EBITDA NPM

Aegis Logistics 7,314 11,026 51% 223 (687) - 122 (576) - -6% -5%

Mercator Lines 7,777 11,001 41% 1,357 1,698 25% 16 234 1406% 15% 2%

CONCOR 9,711 10,462 8% 2,807 2,774 -1% 2,285 2,412 6% 27% 23%

Shipping Corp. of Ind. 8,889 9,789 10% 1,612 (1,291) -180% 1,231 741 -40% - 8%

Allcargo 7,039 8,116 15% 781 1,048 34% 567 559 -1% 13% 7%

GE Shipping 6,111 7,643 25% 2,574 2,852 11% 1,175 875 -26% 37% 11%

TCI 4,444 4,644 5% 335 360 7% 118 135 14% 8% 3%

Blue Dart 3,188 3,935 23% 397 311 -22% 240 224 -7% 8% 6%

Arshiya 2,125 2,734 29% 423 702 66% 201 345 71% 26% 13%

Essar Ports 8,192 2,719 -67% 2,988 2,145 -28% 276 450 63% 79% 17%

Gati 2,252 2,361 5% 216 277 29% 32 53 65% 12% 2%

Sical Logistics 1,777 1,802 1% 138 197 43% 24 26 7% 11% 1%

Patel Integrated 1,070 1,111 4% 34 35 3% 6 4 -31% 3% 0%

Aqua Logistics 1,329 868 -35% 129 61 -52% 76 13 -84% 7% 1%

Varun Shipping 2,202 790 -64% 1,007 62 -94% 118 825 598% 8% 104%

Shreyas Shipping 486 771 59% 86 42 -51% 45 3 -94% 5% 0%

Gateway Distri. 520 563 8% 271 321 19% 230 207 -10% 57% 37%

SEAMEC Ltd 247 308 25% (67) (230) - (99) (272) - - -

Company Revenue EBITDA PAT Margins Q3 FY’12




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four s fortnightly logistics track 14th february - 27th febriary 2012

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