Committed Cargo Care coming with IPO to raise Rs 24.95 crore

Committed Cargo Care

• Committed Cargo Care is coming out with an initial public offering (IPO) of 32,40,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 77 per equity share.
• The issue will open for subscription on October 6, 2023 and will close on October 10, 2023.
• The shares will be listed on NSE Emerge Platform.
• The share is priced 7.70 times higher to its face value of Rs 10.
• Book running lead managers to the issue is Fedex Securities.
• Compliance Officer for the issue is Charumita Bhutan.

Profile of the company

Committed Cargo Care is an ISO 9001:2015 Company, headquartered in Delhi. It is a 3PL (Third Party Logistic) provider which specializes in handling Import & Export Cargo and provide integrated services to its customers. Earning and maintaining a reputation for dependable and complete worldwide cargo movement solutions with the motto ‘Customer Pride’. The company started its operations as a Clearing House Agent. Committed Group has established its hub at Delhi, Mumbai, Chennai, Jaipur, Ludhiana, Agra and a reliable network of associate offices in India and world over and is also an accredited member of FIATA, The Air Cargo Agent Association of India (ACAAI) and International Air Transport Association (IATA).

The company provides integrated logistics services such as cargo management solutions, order management, international freight management, customs and cross-border movement, heavy and over-dimensional cargo movement etc. Its well-established network and tracking software enables to provide fast and reliable information to its client. Thus, capable of handling - packaging, warehousing, freight forwarding, custom clearance of export and import cargo of commercial consignments, diplomatic and non-diplomatic consignments, special services and forwarding of cargos, with an objective to provide the most convenient and cost-effective transportation method by air, courier, sea and road any time & anywhere around the globe. Its customers operate in various sectors across India, including automotive and heavy engineering, telecom, food and agro, fastmoving consumer goods (FMCG), paint, handicrafts, ecommerce products, garments, pharma and dairy. 

Proceed is being used for:

• Meeting working capital requirements
• General corporate purposes

Industry overview

India has been the world’s fastest-growing major economy for four of the past five years, due to rising demand for goods and services. The movement of goods across the country and beyond its borders has created economic opportunities for millions of India’s citizens. The logistics sector represents five percent of India’s Gross Domestic Product (GDP) and employs 2.2 crore people. India handles 4.6 billion tonnes of goods each year, amounting to a total annual cost of Rs 9.5 lakh crore. These goods represent a variety of domestic industries and products: 22 percent are agricultural goods, 39 percent are mining products and 39 percent are manufacturing-related commodities. Trucks and other vehicles handle most of the movement of these goods. Railways, coastal and inland waterways, pipelines, and airways account for the rest.

India is world's fifth-largest economy in terms of nominal GDP and among the fastest growing major economy world-wide. Efficient logistics ecosystem is considered to act as a catalyst in enhancing the competitiveness of all the sectors of the economy. Thus, improving supply chain efficiencies and reducing logistics costs are fundamental to India capitalizing on this strategic shift and meeting the well-defined aspiration to become a $5 trillion economy by 2025. India’s logistics sector comprises over 10,000 types of products and has a market size of Rs 11 lakh crore. It is expected to grow to a market of Rs 15 lakh crore by 2022. 

India is world's fifth largest economy by nominal GDP and is one of the fastest-growing economies globally. Efficient logistics is the bed rock for a growing economy like India. The reduction in logistics cost could be a key enabler in enhancing the competitiveness of all sectors of the economy. Improving supply chain efficiencies and reducing logistics costs are fundamental to India capitalizing on this strategic shift and meeting the well-defined aspiration to become a $5 trillion economy as set by the Hon’ble Prime Minister.

Pros and strengths

Smooth flow of operations: Established relationship with customers and suppliers ensures stability in demand and an uninterrupted supply of raw materials. It has maintained long-standing relationship with its major customers. It is successful in building a strong client base for its business. Its existing relationships help it to get repeat business from its customers. This has helped it to maintain a long-term working relationship with its customers and improve its customer retention strategy.

Existing supplier relationship: Its existing supplier relationship protects the business with terms of supply and pricing of the products, the quality of the products offered etc. it, being a small and medium size organization, rely on personal relationships with its suppliers. The company enjoys existing relationship with its suppliers. Further, it also leverage the past experience of its management in maintaining effective supplier relationship. 

Well-defined organizational structure: The Company has a qualified and experienced management team empowered to take timely decision which makes the operations of its business smoother and ensures efficiency in all aspects of its operations. 

Risks and concerns

Business dependent on road network in India: The transportation and delivery services it provides are dependent on the road network in India. There are various factors which affect road transport such as political unrest, bad weather conditions, natural calamities, road construction, road quality, regional disturbances, fatigue or exhaustion of drivers, improper conduct of the drivers, accidents or mishaps and third-party negligence. Even though it undertakes various measures to void or mitigate such factors to the extent possible, some of these could cause extensive damage and affect its operations.

Require high working capital: Its business demands substantial funds towards working capital requirements. In case there are insufficient cash flows to meet its working capital requirement or it is unable to arrange the same from other sources or there are delays in disbursement of arranged funds, or it is unable to procure funds on favourable terms, it may result into its inability to finance its working capital needs on a timely basis which may have an adverse effect on its operations, profitability and growth prospects.

Face competition: It may faces competition from a number of international and domestic third-party logistics service providers, especially as the trend toward larger-scale logistics providers in India continues. Some of its competitors may have significantly greater financial and marketing resources and operate larger networks than it does. In the regions of India in which it may operates, it may faces competition from certain regional logistics services providers and the unorganized sector, some of which have market presence in their respective areas of operation. It may also faces competition from new entrants into the logistics service industry. If it cannot maintains, or gain, sufficient market presence or are unable to differentiate ourselves from its competitors, it may not be able to compete effectively.

Outlook

Committed Cargo Care is a 3PL (Third Party Logistic) provider which specializes in handling Import & Export Cargo and provide integrated services to its customers. Earning and maintaining a reputation for dependable and complete worldwide cargo movement solutions with the motto ‘Customer Pride’. On the concern side, the industry in which it operates is unorganized and fragmented with many small and medium-sized companies. Logistics being a global industry, it faces competition from various domestic and international players. It competes with other service provider on the basis of service quality, price and reliability. While these factors are key parameters in client’s decisions matrix in availing service, it try to offers the best quality service at economical price.

The company is coming out with an IPO of 32,40,000 equity shares of Rs 10 each at a fixed price of Rs 77 per share to mobilize Rs 24.95 crore. On performance front, its total revenue increased by 16.23% to Rs 122.43 crore for the financial year ended March 31, 2023 from Rs 146.12 crore for the financial year ended March 31, 2022. Its profit after tax increased by 72.70% to Rs 5.33 crore for the financial year ended March 31, 2023 from Rs 3.09 crore for the financial year ended March 31, 2022. Meanwhile, it shall enhances its customer base by entering new geographies. The company already has its hub at Delhi, Mumbai, Chennai, Jaipur, Ludhiana and Kolkata. It now intends to create its presence in Tier II and Tier III Cities. These cities, especially industrial cities, provide big business opportunity for the services being offered by Company and its subsidiary.