Allcargo looks to unlock value in Gati, taps Avendus for PE raise

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Subscribe to enjoy similar stories. Allcargo Logistics Ltd is looking to sell 25-40% stake in its subsidiary Allcargo Gati Ltd which it acquired nearly five years ago, two people aware of the development said. The company has hired investment bank Avendus to scout for investors and is looking at a valuation of $300 million for the subsidiary, the people said.

Allcargo, which acquired the then Gati Ltd in April 2020, restructured the business and raised its shareholding over a year ago, one of the two people said. "The firm is now looking to unlock value in Gati," the person said, adding the transaction is in initial stages, and will help the company expand and invest in technology. Allcargo's stake in Gati rose marginally from 46.86% at the time of the acquisition to 47.30% at the end of FY23.

Shares of Allcargo Gati closed 1.96% lower at ₹85.99 a share on NSE Wednesday, with a market capitalization of ₹1,264.58 crore. “The firm will look at selling around 25% stake in Gati. This could be mix of primary and secondary stake sale.

Depending on the buyer interest, the stake can go up to 40% too," the second person said, adding the company will approach mid-size private equity and sovereign wealth funds. Earlier, Allcargo had sold a majority stake in its warehousing business to global private equity investor Blackstone for ₹380 crore, which was used to develop logistics parks in key consumption hubs. Also read | Allcargo Logistics share price surges 12% post July business update; can it rise more? Founded by Shashi Kiran Shetty in 1993, Allcargo provides services such as multimodal transport operations, container freight station operations, contract logistics and logistics parks.