- Shares of KKR-backed LEAP India fell 5.3% in their trading debut on Friday, valuing the supply chain logistics firm at 69.18 billion rupees ($725.2 million).
- The shares listed at 165.9 rupees apiece on the National Stock Exchange of India, a premium of 4.3% to their issue price of 159 rupees.
- Founder and MD Sunu Mathew expects profit after tax (PAT) growth to remain above 50%, supported by lower interest costs as the company uses initial public offering (IPO) proceeds to repay debt.
- Vertical Holdings II sold about $39 million worth of shares in a private placement ahead of the public launch of the IPO.
- The IPO comprised a fresh issue of shares worth $50.3 million and an offer-for-sale of $209.7 million, mostly by KKR-backed.
- The IPO received bids for 8.38 times the number of shares on offer in a $260 million IPO.
- Retail investors subscribed 1.71 times the shares reserved for them, on valuation concerns, analysts said.
Shares of KKR-backed LEAP India fell 5.3% in their trading debut, valuing the supply chain firm at $725.2 million. The stock opened at ₹165.9, a 4.3% premium over its issue price of ₹159, but faced scrutiny due to declining EBITDA margins and valuation concerns.12
The IPO raised $260 million, with bids for 8.38 times the shares on offer. The offering included a fresh issue of shares worth $50.3 million and an offer-for-sale of $209.7 million, primarily by KKR. Retail investors subscribed 1.71 times the reserved shares, reflecting cautious sentiment.
Sunu Mathew, Founder and MD, anticipates profit after tax (PAT) growth exceeding 50%, driven by lower interest costs from debt repayment using IPO proceeds. He stated, “PAT, definitely, we will be growing ahead of 50% plus.” Mathew also highlighted the potential for profitability as depreciated plastic assets in the automotive sector near the end of their depreciation cycle.
LEAP India aims to expand its pallet pooling and material handling equipment rental businesses, with Mathew projecting that the pallet business will contribute 66% to revenue, while the automotive sector could rise to 24%. He noted, “We will keep doing that, a little more than that, because now we are flushed with capital.”
“The IPO was oversubscribed 8.38 times, with retail investors subscribing 1.71 times despite valuation concerns. Founder Sunu Mathew expects PAT growth above 50% as proceeds repay debt, and plans to add 700,000 to 1 million pallets this year.”
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