Article

Future Supply Chain Solutions Ltd- Information Note

04 Dec 2017 Nikita Bhoota

This document summarizes a few key points related to the issue and should not be treated as a comprehensive summary. Investors are requested to refer the Red Herring Prospectus for further details regarding the issue, the issuer company and the risk factors before taking any investment decision. Please note that investment in securities is subject to risks including loss of principal amount and past performance is not indicative of future performance. Nothing herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so.

 This document is not intended to be an advertisement and does not constitute an invitation or form any part of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever.

Issue Opens - December 6, 2017
Issue Closes - December 8, 2017
Face Value - Rs 10
Price Band- Rs 660- 664
Issue Size – ~Rs 650 cr
Public Issue: ~97.85 lakh shares
Bid Lot - 22 Equity shares              
Issue Type - 100% Book Building

% shareholding Pre IPO
Promoter 57.35
Public 42.65

Source: RHP

Company Background

Future Supply Chain Solutions (FSCS) is one of the largest organised third-party logistics (3PL) service operators in India, according to the A&M report. "The Company provides services in three key areas:  Contract Logistics - Warehousing, distribution and other services accounting for ~71% of overall revenues as on 1HFY18, Express Logistics - Point-to-point, less-than truck-load and time-definite transportation services accounting for ~20% of overall revenues as on 1HFY18 and Temperature-Controlled Logistics - Cold-chain warehousing, transportation solutions, distribution of perishable products accounting for ~4% of overall revenues as on 1HFY18.

Offer Details

The offer consists of an Offer for Sale (OFS) of up to ~97.85 lakh equity shares.

Key Points

FSCS’s customer base spans many sectors, including retail, fashion and apparel, automotive and engineering, food and beverage, FMCG, e-commerce, healthcare, electronics and technology, home and furniture and ATMs. Of the top 20 customers of the company (other than the promoter and certain group companies), which accounted for approximately 20.1% of the revenue from operations in FY17, the company has served nine customers for over five years. For FY17, company’s 10 largest customers (other than the promoter and certain group companies) accounted for 14.8% of the revenue from operations

FSCS is one of the India’s largest organised third-party logistics operators, according to the A&M Report. It has extensive network of 46 distribution centres, 14 hubs and 106 branches (including franchisees), covering 11,235 pin codes across 29 states and 5 union territories. A&M report further states that, its MIHAN distribution centre (Nagpur) is one of the largest and most automated distribution centres in India. As per the report, the Indian 3PL market has grown at a CAGR of approximately 12% over FY12-17 and the 3PL industry growth in India is expected to continue in line with the historical growth trajectory due to strong demand and supply side drivers.

Key Risk

Future Group Entities are the key customers of the company. The revenue from promoter and group companies accounted for 62.5%, 49.5% and 46.5% of the total revenue from operations for FY2017, FY2016 and FY2015 respectively. Further, the company is reliant on the various sectors in which the Future Group Entities operate. If any of those sectors suffer a downturn, the company’s financial performance would be impacted.

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Future Supply Chain Solutions Ltd- Information Note

04 Dec 2017 Nikita Bhoota

This document summarizes a few key points related to the issue and should not be treated as a comprehensive summary. Investors are requested to refer the Red Herring Prospectus for further details regarding the issue, the issuer company and the risk factors before taking any investment decision. Please note that investment in securities is subject to risks including loss of principal amount and past performance is not indicative of future performance. Nothing herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so.

 This document is not intended to be an advertisement and does not constitute an invitation or form any part of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever.

Issue Opens - December 6, 2017
Issue Closes - December 8, 2017
Face Value - Rs 10
Price Band- Rs 660- 664
Issue Size – ~Rs 650 cr
Public Issue: ~97.85 lakh shares
Bid Lot - 22 Equity shares              
Issue Type - 100% Book Building

% shareholding Pre IPO
Promoter 57.35
Public 42.65

Source: RHP

Company Background

Future Supply Chain Solutions (FSCS) is one of the largest organised third-party logistics (3PL) service operators in India, according to the A&M report. "The Company provides services in three key areas:  Contract Logistics - Warehousing, distribution and other services accounting for ~71% of overall revenues as on 1HFY18, Express Logistics - Point-to-point, less-than truck-load and time-definite transportation services accounting for ~20% of overall revenues as on 1HFY18 and Temperature-Controlled Logistics - Cold-chain warehousing, transportation solutions, distribution of perishable products accounting for ~4% of overall revenues as on 1HFY18.

Offer Details

The offer consists of an Offer for Sale (OFS) of up to ~97.85 lakh equity shares.

Key Points

FSCS’s customer base spans many sectors, including retail, fashion and apparel, automotive and engineering, food and beverage, FMCG, e-commerce, healthcare, electronics and technology, home and furniture and ATMs. Of the top 20 customers of the company (other than the promoter and certain group companies), which accounted for approximately 20.1% of the revenue from operations in FY17, the company has served nine customers for over five years. For FY17, company’s 10 largest customers (other than the promoter and certain group companies) accounted for 14.8% of the revenue from operations

FSCS is one of the India’s largest organised third-party logistics operators, according to the A&M Report. It has extensive network of 46 distribution centres, 14 hubs and 106 branches (including franchisees), covering 11,235 pin codes across 29 states and 5 union territories. A&M report further states that, its MIHAN distribution centre (Nagpur) is one of the largest and most automated distribution centres in India. As per the report, the Indian 3PL market has grown at a CAGR of approximately 12% over FY12-17 and the 3PL industry growth in India is expected to continue in line with the historical growth trajectory due to strong demand and supply side drivers.

Key Risk

Future Group Entities are the key customers of the company. The revenue from promoter and group companies accounted for 62.5%, 49.5% and 46.5% of the total revenue from operations for FY2017, FY2016 and FY2015 respectively. Further, the company is reliant on the various sectors in which the Future Group Entities operate. If any of those sectors suffer a downturn, the company’s financial performance would be impacted.

Research Disclaimer