Allcargo Appoints Avendus To Sell Up To 40% Stake In Gati

Allcargo Logistics Ltd is looking to sell 25-40% stake in its subsidiary Allcargo Gati Ltd, which it acquired nearly five years ago, two people aware of the development said.

- Sneha Shah & Satish John

Allcargo Logistics Ltd is looking to sell 25-40% stake in its subsidiary Allcargo Gati Ltd, which it acquired nearly five years ago, two people aware of the development said. The company has hired investment bank Avendus to scout for investors and is looking at a valuation of $300 million (around ₹2,500 crore) for the subsidiary, the people said.

Allcargo, which acquired the then Gati Ltd in April 2020, restructured the business and raised its shareholding over a year ago, one of the two people said. "The firm is now looking to unlock value in Gati," the person said, adding that the transaction is in initial stages and will help the company expand and invest in technology.

Allcargo's stake in Gati rose marginally from 46.86% at the time of the acquisition to 47.30% at the end of FY23. Shares of Allcargo Gati closed 1.96% lower at ₹85.99 apiece on NSE Wednesday, with a market capitalization of ₹1,264.58 crore.

"The firm will look at selling around 25% stake in Gati. This could be a mix of primary and secondary stake sale."

Depending on the buyer interest, the stake can go up to 40% too," the second person said, adding that the company will approach mid-sized private equity and sovereign wealth funds.

Avendus declined to comment on Mint's queries.