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Allcargo Logistics will finalise the acquisition of a controlling stake in express distribution company Gati on Thursday as it seeks to plug its last- mile gap on the road to becoming an end-to-end logistics firm catering to e-commerce giants such as Flipkart and Amazon.
The board of Allcargo and Gati will meet separately on Thursday to approve the deal, multiple sources said. BusinessLine could not ascertain the structure or the financial details of the transaction.
Allcargo said in a filing to BSE that its board will meet on Thursday to consider issue of secured/unsecured redeemable non-convertible debentures on a private placement basis for up to ₹195 crore.
Gati said its board will meet on Thursday to consider fund- raising by way of preferential issue and other related matters.
The acquisition of Gati, which runs a fleet of over 5,000 trucks, including 200-plus refer trucks and over 2,400 last-mile e-commerce delivery fleet, is seen as a good fit for Allcargo.
Allcargo Logistics and Industrial Parks, a unit of Mumbai-listed Allcargo Logistics, is developing 6.5 million sq ft of warehousing space spread across the National Capital Region, Delhi, Bengaluru and Hyderabad.
Of this, Allcargo has signed up for 3.5 million sq ft — 2 million sq ft with Flipkart, one million sq ft with Decathlon and 0.5 million sq ft with other customers, Allcargo Logistics CMD Shashi Kiran Shetty told BusinessLine in January.
An Allcargo executive said that the planned acquisition will take the company to a “different level”.
“...It’ll (last-mile logistics) take us to a different level because today the industry is talking of value addition. It’s a question of how we provide value addition to our customers who want end-to-end services,” said the executive, asking not to be named ahead of the board approval.
“It makes sense to by an infrastructure that is readily available, which otherwise would take at least 10 years to build. And, if you can infuse it with technology,... I am sure it will take us to the next level,” he added.
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