Allcargo Gati Raises Rs.169.28 Crore Through QIP to Boost Growth

Allcargo Gati Ltd, an express logistics company has secured Rs.169.28 crore through a Qualified Institutional Placement (QIP). This capital injection will strengthen the company’s financial health and drive expansion across different business segments. The shares of Allcargo Gati Ltd. dropped by around 10% yesterday, approaching the 52-week low of Rs.90. The stock has fallen in five of the last six trading sessions.

QIP Details

The capital raise was approved by the company’s board during a meeting on June 28, 2024, which authorized the issuance and allotment of equity shares to qualified institutional buyers at a premium of 1.51% of Rs.101 per share. The QIP attracted a range of investors, culminating in a total raise of around  Rs.169.28 crore.

Allocation of Funds

As per the funds, the proceeds from the QIP will be allocated to several key areas: upgrading digital infrastructure to enhance operations, expanding and modernizing logistics to meet growing demand, and reducing debt to improve the company’s balance sheet. Sarkari emphasized that these investments will drive future growth, with a particular focus on leveraging digital to elevate customer service on the company’s end.

Management’s Insights

Pirojshaw Sarkari, Managing Director and CEO of Gati Express and Supply Chain Pvt. Limited (GESCPL), highlighted that the QIP brings out investor confidence in the company’s overall business and market positioning. Additionally, the raised funds will boost the company’s financial stability and support growth plans in various sectors.

Growth Plans 

As a part of the Allcargo Group, Allcargo Gati, by leveraging the group’s established legacy and leadership in the logistics sector is well-positioned to achieve growth in the coming future. The focus on technological and infrastructural upgradation aligns with the company’s strategy.

Conclusion: In conclusion, the QIP and the deployment of the raised funds reflect Allcargo Gati’s plans to strengthen its market position and financial health. With planned investments in technology, infrastructure, and debt reduction, the company seems poised to enter a new phase of growth, driven by innovation and better customer service.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.