Rs 35 Crore Bet! Indian Logistics Giant Doubles Down on Express Delivery!

Fueling Growth: Fresh Capital for B2B Logistics Expansion

Investment Approval
Mahindra Logistics Limited (MLL) announced that its Investment Committee has approved an investment of up to Rs 35 crores in its wholly-owned subsidiary, MLL Express Services Private Limited (MESPL). The investment will be through a subscription to a rights issue of up to 3.5 crore equity shares at a face value of Rs 10 per share. The investment aims to meet MESPL’s working capital requirements, support continuing operations, and address general corporate needs.

Background of MESPL
MESPL, operating under the brand "Rivigo by Mahindra Logistics," offers B2B express logistics services across India. The company has an extensive network with over 19,000 pin codes and more than 220 processing centers and branches. MESPL reported a significant turnover of Rs 364.22 crores in FY 2023-24, showing strong growth from Rs 121.62 crores in FY 2022-23.

Industry and Market Scenario
The logistics sector continues to show resilience despite macroeconomic challenges, with the festive season boosting logistics activity. However, the industry faces cost pressures due to driver shortages, high fuel prices, rising interest rates, and higher toll charges. MESPL’s investment aligns with the growing demand for warehousing services and the evolving needs of the logistics industry.

Operational Performance and Challenges
MESPL has faced operational challenges in its Express business, particularly during the festive peak. While new contracts added nearly 3,500 metric tons monthly, flat volumes quarter-on-quarter impacted service levels and customer retention. Despite this, the company remains focused on enhancing volume and profitability.

Future Outlook
Management remains cautiously optimistic about growth opportunities. Technology upgrades, including the LOGIONE suite and a new analytics platform for emissions measurement, are expected to improve operational efficiency. MESPL’s strategic initiatives and investment are aimed at capturing a larger market share and enhancing customer engagement strategies.

This investment will not alter the shareholding structure, and MESPL will remain a 100 per cent wholly-owned subsidiary of Mahindra Logistics Limited.

Disclaimer: The article is for informational purposes only and not investment advice.