Blue Water Logistics Ltd. IPO: Key Details

Blue Water Logistics

• Blue Water Logistics is coming out with an initial public offering (IPO) of 30,00,000 equity shares in a price band Rs 132-135 per equity share.
• The issue will open on May 27, 2025 and will close on May 29, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 13.20 times of its face value on the lower side and 13.50 times on the higher side.
• Book running lead manager to the issue is Smart Horizon Capital Advisors.
• Compliance Officer for the issue is Priya Bharat Dholu.

Profile of the company

Blue Water Logistics is engaged in the business of providing logistics and supply chain solutions to its customers. The company’s key services include freight forwarding, custom clearance and transportation handling services. It is a Multimodal Transport Operator registered under the Multimodal transportation of Goods Act 1993 to carry on the business of multimodal transportation.

The company operates from its registered office situated in the city of Hyderabad and through 5 branch offices situated in the city of Chennai, Delhi, Jaipur, Visakhapatnam and Thane, respectively. It majorly provides services to its customers who are engaged in imports and exports of different commodities. Over the years, it has served its customers in different industries including confectionary products, chemicals, crockery, natural stones, textile, electronics and fitness equipments.

In the course of its business operations, it arranges various goods transportation services, including arranging commercial vehicles, air freight space, rail transport, and, when necessary, warehouse/ custom freight station facilities for the storage and handling of goods. As of March 31, 2025, it owns 25 commercial vehicles used for diverse transportation purposes. Further, it also intends to purchase 20 commercial vehicles as one of the Objects of this Issue. Access to such large vehicle network enables it to scale its business as the demand increases and also cater to various business opportunities.

Proceed is being used for:

• Funding of capital expenditure requirements by purchase of Vehicles and its body building
• Funding working capital requirements of the company
• General corporate purposes

Industry Overview

The Indian logistics sector is one of the largest in the world and presents a huge addressable opportunity. The sector is critical for the country's economic growth as it connects various elements of the economy and consists of transportation, warehousing and other supply chain solutions ranging from suppliers to end customers. The Department of Commerce set up a logistics division in July 2017 to oversee the integrated development of the sector. Led by the Special Secretary to the Government of India, the division aims to enhance the sector by devising action plans for policy reforms and process enhancements, addressing challenges, and embracing technology.

The industry is characterised by dynamism, undergoing rapid evolution to meet escalating demands. Technological advancements, infrastructure enhancements and governmental initiatives, including GST implementation and the National Logistics Policy (NLP), are precipitating substantial transformations within the sector. Digitalisation, augmented connectivity, and the adoption of cutting-edge innovations such as Radio Frequency Identification (RFID) and Global Positioning System (GPS) are bolstering operational efficiency while mitigating costs. Furthermore, the surge in ecommerce activities and international trade is propelling demand for streamlined logistics solutions.

The Indian logistics sector stands as one of the world's largest and plays a crucial role in driving economic growth. Following a 2% contraction in FY21, the market experienced a robust post-COVID recovery in FY22, witnessing a remarkable 14% growth and reaching a value of $435 billion. As per the projections from EY, a leading global consulting firm, the logistics market in India is poised to expand further, reaching $591 billion by FY27. The report further states that in FY22, organised players represented only 5.5-6% of the logistics market segments, encompassing road transportation, warehousing, and supply chain services. However, organised players are anticipated to exhibit a notable CAGR of approximately 32% between 2022 and 2027. Consequently, their market share is expected to reach 12-15% by FY27. This transformation is expected to be led by organised players’ capacity to provide integrated services, leverage network- and scale-driven efficiencies, and make substantial investments in technology and engineering. These efforts are projected to promote their market competitiveness and capture a larger share of customer business. 

Pros and strengths

Well established relationship with clients: The company through regular communication and flexible logistics solutions, has a client base who provide it repeated business for their different logistics needs. The revenue generated from such repeated customers as a percentage of total revenue from operations for the financial years ended on March 31, 2025, March 31, 2024 and March 31, 2023, respectively are 85.48%, 93.27% and 91.66% of the total revenue from operations. This relationship with clients has been important for it to sustain competition in the industry. By regularly meeting with its clients, it gains a deep understanding of their requirements and provides tailored solutions, whether through multimodal transport or other efficient methods. Its priority is to ensure that goods reach their destinations on time and in optimal condition.

Wide customers’ portfolio across different industry verticals: As of March 31, 2025, the company has successfully served a diverse range of customers spanning across various industries, including chemicals, confectionery, crockery, pharma, paper, automobile, textile, electronics, fitness equipment and agricultural products. Each of these sectors presents unique challenges, and its ability to cater to such varied industries demonstrates its operational efficiency and versatility in addressing their specific logistics needs. Furthermore, during the financial years ended on March 31, 2025, March 31, 2024 and March 31, 2023, respectively, it has welcomed 211, 209 and 143 new customers and the revenue generated as a percentage of total revenue from operations from such customers accounted for 14.52%, 6.73% and 8.34% of its total revenue from operations.

Wide range of logistics services: As a multimodal transport operator, the company is equipped to offer a comprehensive range of logistics services, customized to meet the varied and evolving needs of its clients. Its service offerings encompass ocean freight forwarding, customs clearance, transportation, and other value-added services such as fumigation services, container handling services, all designed to optimize service levels, reduce operational costs, and enhance the quality of its clients' supply chains. With a robust logistics and transportation network, coupled with a diversified service portfolio, it is able to provide end-to-end solutions that ensure the seamless movement of goods across borders and regions. This integrated approach enables it to offer flexibility and efficiency, helping its clients navigate the complexities of their supply chains.

Risks and concerns 

Maximum revenue comes from ocean freight services: A significant portion of the company’s revenue is derived from its ocean freight services, which constitutes a substantial part of its operations. The company’s revenue from ocean freight services contributes 83.03%, 76.26% and 84.32% of its revenue from operations for the financial years ended on March 31, 2025, March 31, 2024 and March 31, 2023, respectively. As a result, any disruption in the uninterrupted operations of its ocean freight services could have a material adverse effect on its business, financial condition, results of operations, and future prospects.

Dependent on a few suppliers for purchases of product/service: The company’s top ten suppliers contribute 75.00%, 79.28%, and 83.00% of its total purchases from freight and other terminal handling charges for the financial years ended on March 31, 2025, March 31, 2024 and March 31, 2023, respectively, based on restated financial statements. It cannot assure that it will be able to get the same quantum and quality of supplies, or any supplies at all, and the loss of supplies from one or more of them may adversely affect its purchases of stock and ultimately its revenue and results of operations.

Depend on certain key customers for its revenues: The company depends on a limited number of customers, which exposes it to a high risk of customer concentration. Fluctuations in the performance of the industries in which certain of its customers operate may result in a loss of customers, a decrease in the volume of work it undertakes or the price at which it offers its services. Any decline in its quality standards, growing competition and any change in the demand for its services by these customers may adversely affect its ability to retain them. It cannot assure that it shall generate the same quantum of business, or any business at all, from these customers, and loss of business from one or more of them may adversely affect its revenues and profitability.

Outlook

Blue Water Logistics provides logistics and supply chain solutions. The company's primary services include freight forwarding, custom clearance and transportation handling services. The company has wide customer portfolio across different industry verticals. It also has a strong domestic and global network coverage. On the concern side, majority of the company’s revenue from operation is derived from its ocean freight services. Any disruption in the continuous operations of its services in ocean freight segment would have a material adverse effect on its business, results of operations and financial. Moreover, the company is dependent on a few suppliers for purchases of product/service. The loss of any of these large suppliers may affect its business operations.

The company is coming out with a maiden IPO of 30,00,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 132-135 per equity share. The aggregate size of the offer is around Rs 39.60 crore to Rs 40.50 crore based on lower and upper price band respectively. On performance front, revenue from operations has increased by 41.47% from Rs 13,867.37 lakh in Fiscal 2024 to Rs 19,618.04 lakh in Fiscal 2025. For Fiscal 2025, the company reported a net profit of Rs 1,067.08 lakh as compared to Rs 594.05 lakh in Fiscal 2024. This increase was driven by the increase in the number of ocean trips in Fiscal 2025.

The company continues to focus on enhancing operational controls and cost efficiencies through optimal freight mix and cost management. To meet these objectives, it proposed to utilize part of the Net Proceeds amounting to Rs 1,051.73 lakh towards purchase of 20 commercial vehicles and its body building which will add to its own fleet of vehicles. Operating its owned vehicles enables it to reduce hiring and operational costs. In addition, availability of outsourced vehicles may be uncertain during periods of high demand. Its fleet of owned vehicles therefore allows it to reduce dependence on outsourced vehicles, improve its service quality and maintain its reputation for reliable and timely delivery of consignments. The company will also obtain all required national permits for the passage of such commercial vehicles.