VRL IPO

Bangalore-based VRL Logistics (VRLL), engaged in transportation of both passengers and freight, has filed its DRHP with SEBI on 2ND April, 2008 to enter the capital market with a public issue of 2.70 crore equity shares of Rs 10 each, along with one detachable warrant for every equity share allotted in the public issue, at a price to be dediced through a 100% book building process.

The issue will constitute 27.64% of the fully diluted post issue equity share capital of the company prior to exercise of the detachable warrants. The company also proposes to make a pre- IPO placement.

The company intends to list the shares on BSE and NSE and the BRLM to the issue is Edelweiss Capital.
The company intends to use the proceeds from the issue to part finance the setting up of trans-shipment hubs at Gurgoan, Sholapur and Bijapur at Rs 53.96 crores; setting up of booking and delivery office at Gadag at a cost of Rs 4.01 crore and Rs 53.65 crore for purchase of vehicles.

VRLL, a logistics player which operates through the hub and spoke network currently operates from Amritsar in the North to Thiruvanathapuram in the South. Its presence in the East is limited to just one branch in Kolkata. The company now proposes to expand its operation in the eastern region including the North-Eastern states.

The company is into the business of transportation and logistics service of goods and passengers by road. The company’s goods transportation and distribution business is carried across 17states and 7 Union Territories and passenger transport business is carried under the name of Vijayanand Travels in the states of Karnataka, Maharashtra and Tamil Nadu covering 56 cities. The company has 40 branches and 466 franchisees across states of Karnataka, Maharashtra and Tamil Nadu.

The company’s fleet strength as at February end, 2008 was 2,683 vehicles, comprising of 2446 vehicles for goods transportation, 197 vehicles for passenger travel and 40 vehicles for internal use, which includes forklifts, cranes, staff buses, water tankers, diesel tankers, tractors etc.

The company also possess in-house competencies in body designing of trucks, vehicle repair and maintenance. It also has a R&D unit and a software development center which enables the company in cutting cost and increase vehicle efficiency and performance. The company has also entered into air charter business for providing services to individuals and corporate passengers.

The company which forayed into the wind energy business last year, has set up a 42 MW wind mill project at an investment of Rs 250 crore at Hubli. The company is now demerging its wind power business to focus on its core activity - goods and passenger transport. It is in the process of setting up a separate company for managing the wind mill business,

For the year ended March 31, 2007, the company posted total income of Rs 442.93 crores and net profit of Rs 85.20 crore ( profit on sale of shares of Rs 116.50 crore.The profit before extraordinary item was in the negative at Rs 31.30 crore ), as against an income of Rs 356.95 crore and the net profit Rs 5.06 crore for FY06. For the 6 months ended September 30, 2007, the income was at Rs 271.99 crore with a net profit at Rs 9.32 crore.