Committed Cargo Care IPO Review: Committed cargo care Limited is coming up with its Initial Public Offering. This is an SME (small and medium size enterprise) which is going to be listed on NSE SME. The IPO will open for subscription on 6th October 2023, and closes on 10th October 2023.

This article will provide a comprehensive review of the IPO, including an in-depth analysis of the company’s financials,  as well as the strengths and weaknesses of Committed cargo care. 

Committed Cargo Care IPO Review – About The Company

Committed cargo care was established in 1988 and based in Delhi, committed plan cargo  is a leading provider of integrated logistics services. It specializes in offering comprehensive cargo management solutions, including international freight management, customs and cross-border movement, as well as the transportation of heavy and over-dimensional cargo.

As a Third-Party Logistics provider, the company excels in handling both import and export cargo, delivering a seamless service to its customers. Its core competencies include packaging, warehousing, freight forwarding, and custom clearance of commercial, diplomatic, and non-diplomatic consignments.

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The company is committed to providing the most efficient and cost-effective transportation methods by air, courier, sea, and road to any location worldwide.

The company serves a diverse range of sectors across India, including automotive and heavy engineering, telecom, food and agro, fast-moving consumer goods (FMCG), handicrafts, Paints, e-commerce products, garments, pharma, and dairy. Its primary objective is to offer special services and forwarding of cargos that meet the unique needs of each customer.

Committed Cargo Care IPO Review – Industry Overview

India, being the world’s fastest-growing major economy for four out of the past five years, has seen a surge in demand for goods and services. This growth has significantly impacted the logistics sector, which now constitutes five percent of India’s Gross Domestic Product (GDP) and provides employment to 22 million people.

The logistics sector in India is diverse, dealing with over 10,000 types of products and boasting a market size of  11 lakh crore. It is projected to expand to more than  15 lakh crore.

The goods transported represent a wide array of domestic industries and products: 22 percent are agricultural goods, 39 percent are mining products, and the remaining 39 percent are manufacturing-related commodities.

India’s economy is primarily driven by domestic demand, with consumption and investments accounting for 70% of economic activity. As the demand for goods continues to rise, it is anticipated that goods movement will increase to 15.6 trillion tonne-km by 2050.

This growth will particularly boost road-freight transport, leading to over three trillion kilometers travelled on Indian roads by freight vehicles in 2050.

Committed Cargo Care IPO Review – Financials

Committed  Cargo care  has shown remarkable financial growth over the past few years. The company’s net worth has impressively risen from ₹20.4 Cr in March 2021 to ₹28.8 Cr in March 2023.

Concurrently, there has been a slight increase in the company’s revenue, moving from ₹113.8 Cr to ₹122.4 Cr.

The Profit After Tax (PAT) has also followed a positive trajectory, escalating from ₹2.3 Cr in March 2021 to ₹5.3 Cr in March 2023.

However, it’s noteworthy that the company’s borrowing has also increased, going up from ₹31 lakh in March 2021 to ₹67 lakh in March 2023.

As of 2023, the company’s key financial indicators are as follows: Return on Equity (ROE) at 18.48%, Return on Capital Employed (ROCE) at 24.06%, and Earnings Per Share (EPS) standing at ₹7.04.

FINANCIAL METRICS

(Source: RHP of the company)

Competitors of the company

In the logistics industry, Committed Cargo care encounters competition from a variety of domestic and international players. Notable competitors include Tiger Logistics India Ltd, Jet Freight Logistics Ltd, and Total Transport Systems Limited.

Strengths of the Company

  •  As an IATA licensed air cargo agent, the company offers competitive air freight rates for both export and import shipments to and from India. Its strong relationships with reputable airlines enable it to handle consignments of all sizes to most global destinations
  •  The company has a robust network of overseas agents specializing in both sea and air shipments. This network, coupled with favorable supplier relationships, ensures reliable supply, competitive pricing, and high-quality products. Increasing efficiency in customs declaration processes is vital for Committed Cargo Care’s continued success in the competitive logistics industry.
  • Committed care Cargo provides round-the-clock sailings from any location to anywhere in the world. Whether it’s “Door to Door”, “Door to Port”, or “Port to Port”, the company offers flexible services tailored to its customers’ needs.
  •  The company’s Multi Modal Transport Operator  services include multiple modes of transportation for forwarding goods from source to destination, supported by a strong network of overseas agents specializing in sea and air shipments.
  • The company  provides comprehensive third-party logistics services and end-to-end customized logistics solutions, focusing on achieving the highest level of customer satisfaction

 Weaknesses of the Company

  • The company’s profitability may be adversely affected by increases in carrier, labour, or other costs. Economic recessions, downturns in customer business cycles, carrier price increases, and interest rate fluctuations can lead to financial instability
  • Committed cargo care has top 10 customers contributing approximately 46.99% of its business. Any decline in quality standards, increased competition, or changes in customer demand could negatively impact the company’s ability to retain these clients.
  • The company does not have long-term contracts with shipping lines, transporters, or custom clearance agents. Any disruption or discontinuation of their services could affect the company’s ability to deliver its services to clients
  • Committed cargo care  deals with the clearance and transportation of hazardous goods. Any mishandling of hazardous substances like chemicals or radioactive products could adversely affect the business.
  • The company faces competition from numerous international and domestic third-party logistics companies. These competitors may have a wider domestic and global network of warehouses and delivery centers and may price their services with significant discounts.

Committed Cargo Care IPO Review – GMP

 As of 4th October 2023, The GMP for committed cargo care is not yet available.

Committed Cargo Care IPO Review – Key IPO Information

PARTICULARSDETAILS
IPO Size₹24.98Cr
Fresh Issue₹24.98Cr
opening date 6th october 2023
closing date10th october 2023
face value ₹10 per share
price band₹77 per share
lot size 1600 shares
Minimum lot 1 (1600 shares)
maximum lot 1 (1600 shares)
Investment amount ₹1,23,200
listing date 18th october 2023

Promoters: Rajeev Sharma, Nitin Bharal, Narendra Singh Bisht, Yashpal Arora and Sonia Bharal

Book Running Lead Manager:  Fedex securities private limited

Registrar to the Offer:  Bigshare services private limited

The Objective of the Issue: 

The Company proposes to utilize the Net Proceeds from the issue towards the following objects:

  • Meeting working capital requirements.
  • General corporate purposes.

In Closing

Committed Cargo Care operates in the competitive logistics sector, facing both international and domestic competitors. As part of its growth strategy, it plans to focus  on increasing sales volume. It is also actively seeking areas to reduce costs and achieve efficiencies. This approach aims to ensure the company remains cost-competitive while maintaining high-quality services for its customers through standard operating procedures.

However it is important to note that this is an SME IPO  where the minimum investment amount is ₹1,23,200 Which is higher than mainline IPO.

What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.

Written by Niharika Jadhav

By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks also get updated with stock market news, and make well-informed investment decisions.


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