Shares of Allcargo Logistics rallied nearly 5% in intraday trade on Tuesday, in an otherwise muted broader market, after the logistics company proposed to buy a stake in Gati-Kintetsu Express. The Mumbai-based end-to-end logistics solutions provider will buy a 30% stake, or 1.50 lakh shares, in Gati-Kintetsu Express for ₹406.71 crore, it said in a post market release on Monday.
Gati-Kintetsu Express (GKEPL) is a joint venture (JV) company between Gati, a homegrown express distribution and supply chain solutions, and Japan's leading logistics provider Kintetsu World Express (KWE). In the JV, Allcargo group firm Gati owns a 70% stake and KWE holds the remaining 30% shareholding.
Reacting to the news, Allcargo shares opened 2.6% higher at ₹355.45 against the previous closing price of ₹346.40 on the BSE. During the session, the logistics stock gained as much as 4.7% to hit an intraday high of ₹362.65. The counter finally settled 1.3% higher at ₹350.90 levels, while the market capitalisation stood at ₹8,621.46 crore at the end of day’s trade.
As per the exchange filing, Allcargo group will acquire a 30% stake in Gati Kintetsu Express from its Japanese JV partner KWE group.
“A share purchase agreement has been signed between the company, KWE-Kintetsu World Express (S) Pte (KWE Singapore), KWE Kintetsu Express (India) (KWE India), Gati and Gati-Kintetsu Express (GKEPL) for acquisition of aggregate 1,50,000 equity shares i.e. 30% stake of GKEPL,” Allcargo Logistics said in a regulatory filing on Monday.
The deal comprises 26% stake, or 1,30,000 equity shares, in GKEPL from KWE Singapore and 4% shareholding, or 20,000 equity shares, in GKEPL from KWE India, for an aggregate amount of ₹406.71 crore, it added.
Earlier this month, Allcargo Logistics acquired the remaining 38.87% stake of its partner ACCI in the contract logistics arm for ₹145 crore. With this, Allcargo acquired 100% stake in the contract logistics business, which is engaged in managing inventories and providing third-party supply chain solutions to domestic and international customers across chemicals, auto, e-commerce and other industries. Besides, the board of the company also approved the sale of the smaller non-core customs clearance business of the group. As a result, Allcargo will divest its 61.13% shares for an enterprise value of ₹42 crore.
In February this year, Allcargo entered into a securities purchase agreement (SPA) with BRE Asia Urban Holdings to acquire 90% equity share capital and optionally convertible debentures (OCDs) of Madanahatti Logistics and Industrial Parks. The acquisition was in line with the real estate business being demerged into TransIndia Realty & Logistics Parks, which strategically fit with future plans.
Besides, in January, the logistics firm purchased 75% stake in Fair Trade GmbH, a strong player in Germany, through its subsidiary Allcargo Belgium NV. Fair Trade is a major player in the cargo consolidation segment in Germany, handling cargo movement across the Europe-Asia, Europe-Latin America, and Europe-North America routes.
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