Mahindra Logistics gets Rs 200 crore investment from Kedaara Capital

Kedaara Capital, a private equity firm, co-founded by Manish Kejriwal, former boss of the Temasek India equity company, is to invest Rs 200 crore in Mahindra Logistics, a subsidiary of M&M and a leading third party logistics (3PL) provider.

Mahindra Logistics’ CEO, Pirojshaw Sarkari, told Autocar Professional that by roping in Kedaara Capital, the company hopes to identify the right kind of opportunities to grow the business organically as well as inorganically.

At present, Mahindra Logistics has a 90 percent exposure to the auto sector with the rest being in non-auto sectors. Sarkari said the company hopes to take the non-auto share to 50 percent in about three years, and has identified several potential sectors including fast-moving consumer goods, consumer durables and hi-tech. Moreover, the company hopes to increase its turnover from Rs 1,800 crore to Rs 6,000 crore by the year 2020.

With Kedaara on board, the company will implement both expansion and organisational changes. “Our aim is to be an integrated logistics provider, offering end-to-end solution,” Sarkari said.

The company will also look at a variety of new and upcoming areas such as international freight forwarding, e-commerce logistics and agricultural logistics.

As part of a wider mandate, Mahindra Logistics is looking to develop in-house talent to identify ‘specialists’ who can leverage their skills in the areas that have been identified.

For Kedaara, set up a year ago, this is the fund’s first investment. Last year, Kedaara Capital closed its maiden PE fund with a corpus of $540 million.

India’s logistics sector faces a variety of challenges given that the quality of roads and last-mile connectivity significantly to incurred costs. While road logistics has seen some improvement, better-quality trucks have also helped make the movement of cargo more efficient.

But much remains to be done in terms of refrigerated transport, which affects the transport of perishable goods. On the policy front, the passing of the GST that has been hanging fire for many years now will help the logistics sector.