Shares of this logistic company surged 10 percent after announcing its decision to restructure its business under Allcargo Limited and Allcargo Gati Limited (formerly Gati Limited).
With a market capitalisation of Rs. 7,669 crores, the shares of Allcargo Logistics Ltd started Friday’s trading session on a higher note at Rs. 299 compared to its previous close of Rs. 284.95. The share hit a high of Rs. 315, gaining around 10 percent and currently trading at Rs. 312 apiece.
Such a bullish movement was observed after the boards of Allcargo Logistics Ltd and Allcargo Gati Ltd approved the composite scheme of arrangement for restructuring of businesses under Allcargo Ltd and Allcargo Gati Ltd (formerly Gati Ltd).
As per the scheme, the International Supply Chain (ISC) business of the company will be demerged into a separate entity, Allcargo ECU Limited. This would include the India part of the International Supply Chain business along with the international subsidiaries held under the ECU Worldwide NV.
After the post-demerger, the Express business and Contract Logistics business would come under the resulting entity Allcargo Logistics, which will benefit from combined synergies, and the shareholders of both Allcargo and Allcargo Gati will get direct shareholding, which will help them eliminate inefficient complex corporate structure.
As per the approved swap ratio, shareholders of Allcargo Gati will get 63 shares in the resulting Allcargo Logistics entity (post ISC demerger) for every 10 shares held in Allcargo Gati.
Furthermore, Shareholders of Allcargo will get shares in the ratio 1:1 of the demerged company Allcargo ECU Limited and continue to hold their shares in Allcargo Logistics Ltd, which will now be the entity holding Express and Contract Logistics business directly. This takes into account the 3:1 bonus shares approved by shareholders for Allcargo Logistics recently.
With the merger of Allcargo Supply Chain and Gati Express business, the scheme will create a strong balance sheet and cash flows which will help the companies to drive synergistic growth and expansion in the fast-growing domestic logistics market to create an unmatched powerhouse in the domestic supply chain business.
The scheme mentioned above is expected to be implemented in 10-12 months, accounting for regulatory filings, shareholder approval, Stock Exchange approval NCLT approval, and ROC filings.
Coming onto the company’s financial statements, the revenue increased marginally by 1 percent from Rs. 3,271 crores in the June quarter to Rs. 3,307 crores during the financial September quarter. On a contrasting note, the net profits declined from Rs. 119 crores to Rs. 16 crores during the same timeframe.
According to the BSE data, Ace Investor Mr Mukul Agrwal, entering the stock in September 2021, currently holds 33 lakh equity shares equivalent to a 1.34 percent stake in this company. The current holding value of his investment amounts to Rs. 93.2 crores.
Headquartered in Mumbai, Allcargo Logistics was incorporated in 1993. The company provides integrated and specialised logistics solutions across multimodal transport operations, inland container depots, container freight station operations, contract logistics operations, and project and engineering solutions.
Written By Vaibhav Patil
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