Warburg Pincus is seeking to exit its seven-year investment in Stellar Value Chain Solutions, a third-party logistics company. Investment bank Rothschild has been appointed by the investor to find strategic and financial investors.
It will be a complete sale. The investor and the founders are exiting the company, three people with knowledge of the development said.
The company that has ₹300-350 crore of topline is being valued at ₹550-600 crore, one of the persons cited
According to him, larger logistics services providers in the country have been approached.
“Some of the mid-market PE firms too have been reached out to,” he added.
Emailed queries sent to the spokesperson for Warburg Pincus, Stellar Value Chain Solutions and Rothschild did not elicit any response.
In 2016, Warburg Pincus invested $125 million in the company. As on date Warburg Pincus holds around 91.96% stake in the company with the rest being held by the founder and others, data from VCCEdge shows.
Founded in 2016, Stellar Value Chain Solutions is a new supply chain services company, founded by Anshuman Singh, the company offers multi-user warehousing, primary and secondary distribution, e-fulfilment and cold storage. It serves clients across sectors such as food and beverages, fast moving consumer goods (FMCG), consumer durables, electronics and hi-tech, lifestyle, automotive, pharmaceuticals and engineering industries.
Before starting Stellar, Singh was the chief executive officer at Future Supply Chain Solutions.
For the financial year ended 31 March 2022, the company earned a total revenue of ₹400.7 crore against ₹308.7 crore in the previous fiscal. It incurred a loss of ₹182.9 crore in FY22 against ₹134.6 crore in the previous year, VCCEdge data shows.
In 2018, Stellar had acquired Kolkata-based Innovative Logistics Services Pvt. Ltd and before that it had acquired a majority stake in Kelvin Cold Chain Logistics for an undisclosed amount in 2017.
According to a Mordor Intelligence research report released recently, the Indian 3PL market is expected to register a growth rate of over 11.5% during the forecast period of 2020-2025. The market is expected to be driven by the growth in manufacturing, FMCG, retail and e-commerce sectors. The Indian companies are demanding new logistics capabilities and complex solutions from the 3PL service providers to help them in the successful management of supply chain processes, bring down conventional logistics costs and handle more complicated tasks.
Development of infrastructure like dedicated freight corridors, free trade warehousing zones, logistics parks and container freight stations are expected to improve efficiency of the Indian 3PL market.
The key segments include road, rail, warehousing, cold chain, coastal transportation, container freight stations and inland container depots.
For Warburg Pincus, which has been investing in the Indian market for over two decades now, 2022 will see a slew of partial and full exits from its older investments. According to VCCEdge, Warburg trimmed its stake in Kalyan Jewellers by selling one tenth of its 26.36% stake in the jewellery chain last month. This partial exit comes after a full exit from multiplex chain PVR.