Nippon Express buys 22 percent stake in Future’s logistics arm for Rs 700 crore

The companies plan to jointly explore growth opportunities with this deal, Mayur Toshniwal, Managing Director at Future Supply-chain Solutions told reporters.

The Rs 700-crore equity investment includes both primary as well as secondary investment, he said, adding the deal has received all requisite approvals, including from the fair trade watchdog.

As part of this transaction, FSC has issued 37,89,350 shares to Nippon Express at Rs 664 a share, which is a full 22 percent premium to the current market price.

Through this primary issue, Nippon will hold 8.6 percent stake on a fully diluted basis and FSC will raise around Rs 252 crore for funding its near-term growth plans. The two companies will jointly start the business collaboration from next January

Nippon Express chief managing officer Satoshi Horikiri said, “this partnership will form an important part of our long-term vision of becoming a logistics company with a strong presence globally. “We want to increase our sales outside Japan threefold to $12 bn by 2028 from $4 bn now,” he added.

The domestic logistics industry is around $180 bn and is growing rapidly.

“We have a vision of becoming Rs 10,000-crore company over the next five to seven years by focusing on consumption- driven sectors offering customised solutions such as warehousing, transportation and distribution,” Toshniwal said, adding current revenue is around Rs 1,500 crore.