Mahindra Logistics, a 3PL solutions provider, is eyeing global acquisitions in the freight forwarding space. The Mahindra group company is in discussions with 4-5 South East Asian companies in this regard.

For global logistics players freight forwarding contributes up to 25 per cent of their revenues.

According to Priojshaw Sarkari, Chief Executive Officer, the acquisitions will happen over the “next six months”. These would be in the range of $50-75 million. Mahindra Logistics, he said, is also open to joint ventures with the target company(s). However, the prime requirement will be “large market presence” across the entire South East Asia including Indonesia, Thailand and Singapore.

Acquisitions, according to Sarkari, are likely to be funded by “leveraging the balance sheet”. This could either be by way of raising equity through Qualified Institutional Placements (QIP) or debt. As of now, Mahindra Logistics remains a debt-free company.

“We prefer to go for freight forwarding companies that have larger market presence across South East Asian markets,” he told BusinessLine .

₹6,000-crore turnover

According to Sarkari, the company is targetting a turnover of ₹ 6,000-crore by FY21. In FY19, it reported a turnover of ₹3,851 crore and a net profit of ₹86 crore.

Sources say Mahindra Logistics gets higher margins from warehousing business as compared to pure transportation. Accordingly, it plans to add at least two million sq feet of warehouse space within this fiscal to its present 15 m sq ft across India.

Mahindra Logisitics will play the role of an “anchor customer” of several companies that are floating REITs (real estate investment trusts).

This means, Mahindra Logisitics will takeup large warehousing spaces. It has already done so in Chakan, near Pune and in Tauru Road, near Gurgaon with nearly 500,000 sq ft of space being taken up across these areas.

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