VRL Logistics IPO India: Finance Trading Times

VRL Logistics IPO India

A new IPO is expected to hit the Indian capital markets very soon. The IPO or initial public offering belongs to VRL Logistics Limited.
VRL Logistics IPO
What is the expected size of the VRL logistics IPO?
The company aims to raise around Rs 200 crore through its proposed IPO or initial public offering.

How many shares will be offered for sale through the VRL logistics IPO?
A total of 27 million shares will be offered.

What are the competition aspects for VRL logistics IPO?

The competition is intensifying from several large and small players in the transportation business, which exerts pressure on margins. The high debt levels are likely to adversely impact net profit margins.
The company ventured into businesses in the past which led to tight cash flow situations, leading to delayed payments. Further, the corporate governance structure of the company is inadequate.

What are the business valuations of the VRL Logistics IPO?
VRL has a well established network across the country, with a fleet size of more than 2,500 vehicles and over 2,100 offices. VRL is primarily engaged in the goods transportation and logistics services business; the company also operates a fleet of buses for passenger transport. The company recently ventured into the wind power generation and air charter businesses. VRL, which commenced operations as a proprietary concern in 1976, has a well-established network across the country, comprising 799 owned branches and 1,387 exclusive franchisee offices, and a fleet of 2,486 trucks and 197 buses. In addition, it also has 43 transshipment hubs, which facilitate the hub and spoke business model.

What are the financial Results of VRL Logistics IPO?
In 2006-07, the company reported a net profit of Rs 85.20 crore on a turnover of Rs 441.62 crore. The return on capital employed and return on equity was 39.2 per cent and 141.6 per cent, respectively. Included in VRL’s 2006-07 net profit is a one-time gain of Rs 116.5 crore on account of the stake sale of its media subsidiary.

Any ratings assigned to VRL logistics IPO?
Yes. CRISIL has assigned IPO Grade “2/5” to the proposed initial public offer of VRL Logistics Ltd.
This grade indicates that the fundamentals of the issue are below average to other listed equity securities. Table of Contents
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