Western Carriers (India) IPO Lists at ₹170, Declines 1.16% Below Issue Price

Western Carriers (India), a multimodal, rail-focused, asset-light logistics company, made a disappointing debut on the Indian stock market on Tuesday, 24th September 2024, with its shares listing at a discount to the issue price. The company's initial public offering (IPO) had generated robust demand from investors during its subscription period, but the listing failed to meet market expectations.

Listing Details

• Listing Price: Western Carriers (India) shares were listed at ₹170 per share on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), marking a weak start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a slight discount to the IPO issue price. Western Carriers (India) had set its IPO price band from ₹163 to ₹172 per share, with the final issue price being fixed at the upper end of ₹172.
• Percentage Change: The listing price of ₹170 on both exchanges translates to a decline of 1.16% below the issue price of ₹172.

First-Day Trading Performance

• Opening Price: The Stock opened at ₹170
• Market Capitalisation: As of 9:44 AM, the company's market capitalisation stood at ₹1,733.24 crore.
• Trading Volume: The traded volume was 0.80 lakh shares with a traded value of ₹1.35 crore in the first 30 minutes of trading.

Market Sentiment and Analysis

• Market Reaction: The market reacted negatively to Western Carriers (India)'s listing. The discount to the issue price indicates cautious investor sentiment towards the company's prospects.
• Subscription Rate: The IPO was oversubscribed by 30.46 times, with non-institutional investors leading at 44.67 times subscription.
• Grey Market Premium: Prior to listing, shares were trading at a premium of ₹10-13 in the grey market, suggesting an expected listing gain of 7-8% that did not materialize.

Growth Drivers and Challenges

Expected drivers of future performance:

• Diversified customer base across various sectors
• Asset-light business model focusing on rail logistics
• Steady growth in revenue and profit

Potential challenges:

• Competition in the logistics sector
• Economic fluctuations affecting key client industries
• Regulatory changes impacting transportation and logistics

Utilisation of IPO Proceeds

Western Carriers (India) plans to use the funds for:

• Debt repayment
• Funding capital expenditure requirements
• General corporate purposes

Financial Performance

The company has demonstrated moderate financial growth:

• Revenue increased from ₹1,633 crore in FY23 to ₹1,685 crore in FY24, a growth of 3%
• Net Profit rose from ₹71.5 crore in FY23 to ₹80.3 crore in FY24, an increase of 12%
• CAGR growth of 4% in revenue from operations and 9% in profit between FY22 and FY24

As Western Carriers (India) begins its journey as a listed entity, market participants will closely monitor its ability to leverage its position in the logistics sector to drive future growth and shareholder value. The weak listing suggests that investors may be taking a cautious approach to the company's near-term prospects in the competitive logistics industry.