Proving the Business Case for the Internet of Things

E-commerce boom spurs record demand for India's VRL Logistics IPO

Reuters
April 28, 2015
 
A $75m market debut for Indian parcel delivery firm VRL Logistics has encountered record demand, drawing bids for more than 70 times the number of shares on offer this month, as investors bet on an e-commerce boom. Subscription levels were the highest in nearly eight years, stock exchange data showed, roughly the highest since the global financial crisis hit.
 
Analysts said strong demand was helped by the successful listing of renewable energy firm Inox Wind, which has lifted primary market sentiment, and growing demand for logistics services as Indians buy more online.
 
The sale received bids amounting to 74.26 times the number of shares on offer by the last day, stock exchange data showed. The qualified institutional buyers (QIBs) category was subscribed 58.22 times, while the non-institutional investors' portion was subscribed 250.86 times.
 
Previous record IPO subscriptions include those of Power Finance, subscribed 77.2 times in 2007 and Reliance Power, subscribed 73 times in 2008.
 
VRL competes with companies including Gati and Transport Corporation of India.
 
Rival Gati is also planning to launch a share sale, via advisor Motilal Oswal, to raise nearly $20m, two sources directly involved told Reuters.
 
ICICI Securities and HSBC Securities and Capital Markets (India) Private were the advisers for the VRL Logistics share sale.
 
VRL was founded in 1976 by Vijay Sankeshwar in Gadag, a small town in North Karnataka with a single truck. The company gradually expanded its services to Bangalore, Hubli and Belgaum. From this humble beginning VRL has today grown into a nationally renowned logistics and transport company which is also the largest fleet owner of commercial vehicles in India with a fleet of 3882 vehicles, including 464 tourist buses and 3418 goods transport vehicles.