Iware Supplychain Services Ltd. IPO: Key Details

Iware Supplychain Services

• Iware Supplychain Services is coming out with an initial public offering (IPO) of 28,56,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 95 per equity share.
• The issue will open on April 28, 2025 and will close on April 30, 2025.
• The shares will be listed on SME Platform of NSE.
• The share is priced 9.50 times higher to its face value of Rs 10. 
• Book running lead manager to the issue is Getfive Advisors.
• Compliance Officer for the issue is Shweta Sharma.

Profile of the company

Iware Supplychain Services is an integrated pan India logistics company primarily operating in five different type of services (i) Warehousing (including third-party logistics (3PL) and Carrying & Forwarding Agent), (ii) Transportation (Including Carrying & Forwarding Agent) (iii) Rake Handling Services and (iv) Business Auxiliary Services (v) Rental Income. It operates through its network of its various business offices situated in the state of Gujarat, West Bengal, Uttar Pradesh, Rajasthan, Punjab, Haryana and Delhi.

The company provides transportation services through two primary modes: i) Road Transport - Own Vehicle Fleet: The company operates a fleet of 47 vehicles, each with a National Permit, enabling unrestricted movement across different regions of India. This allows for flexible and efficient goods transportation via roadways. ii) Rail Transport - Rake Handling Services: The company also facilitates rake handling services by hiring rail cargo for bulk transportation. This service includes overseeing the loading and unloading process, ensuring smooth and efficient goods movement between regions through the railway network.

With over 6 plus years of operational experience since inception, backed by the combined experience of more than 20 years of its individual promoters Krishnakumar Jagdishprasad Tanwar and Rajnish Gautam) in the logistics industry. The company provides logistics support and solutions with its: (a) Pan-India presence, (b) integrated service offerings, and (c) large network of vehicle fleet. Its management is assisted by a team of qualified and experienced personnel’s who has provided significant contribution in the growth from 15 vehicles in financial year 2022 to a fleet of 47 vehicles out of which 15 vehicles are of 22 Feet Open Body and remaining vehicles are 32 Feet Containers. 

Proceed is being used for:

• Funding the capital expenditure requirement for the construction of new industrial shed
• Funding working capital requirements
• General corporate purpose

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 Indian economy, ranked fifth globally with a GDP of approximately US$ 3.7 trillion in 2023, experienced rapid growth from 2015 to 2019, with an average annual growth rate exceeding 7%. However, due to strict COVID-19 lockdowns, GDP fell by 7.3% in 2020. A robust recovery followed in 2021 and 2022, driven by a resurgence in the service sector, revitalization of manufacturing, and growth in agriculture, leading to an impressive overall growth of 15.3% over those two years.

The warehousing, industrial, and logistics (WIL) sectors are projected to be crucial for attaining India's vision of being a $5 trillion economy by FY25. The warehouse and logistics industry have benefited the most from the COVID-19 epidemic, increasing its share from 2% in 2020 to 20% in 2021. Because of the growing shift from discretionary to essential internet buying during the COVID-19 epidemic, the e-commerce industry became more appealing and attractive. The expansion of this industry is likely to be aided by a robust economy, government efforts to improve infrastructure, and a favourable business environment. Increasing consumerism and a huge consumer base are fostering the growth of retail and e-commerce in India. The Indian retail sector's market size is predicted to increase at a CAGR of 9% between 2019 and 2030, totalling more than $1.8 trillion.

India's warehousing and logistics sector is vibrant and expanding swiftly, poised to become a critical component of the nation's economic development. While the sector faces some hurdles, it is strategically positioned for sustained growth, offering attractive prospects for both investors and companies. Driven by governmental initiatives to bolster infrastructure and the burgeoning e-commerce industry, this sector is anticipated to significantly fuel India's economic expansion. Additionally, the increasing integration of technology and the government’s encouragement of a digital economy provide substantial opportunities for logistics companies to adopt data analytics, artificial intelligence, and machine learning to enhance operational efficiencies and customer service. 

Pros and strengths

Diversified Service Range: The company's strength lies in its diversified service range, which spans in five different type of services (i) Warehousing (including third-party logistics (3PL) and Carrying & Forwarding Agent), (ii) Transportation (Including Carrying & Forwarding Agent) (iii) Rake Handling Services and (iv) Business Auxiliary Services (v) Rental Income. This extensive portfolio allows it to tailor effective solutions to its client under one roof.

Experienced Management Team: The company's strength is significantly enhanced by its diverse team of 200 individuals of different age and experience. Such a varied team help it to achieve its set target and helps to manage the customer base, enabling it to effectively serve different industries and demographics. This capability not only broadens its market reach but also strengthens its position in the industry.

Diversified Locations: The company’s offices, located across various regions enhancing its market reach and operational resilience. This geographical spread allows it to tap into local markets, adapt to regional demands, and mitigate risks associated with any single location. It fosters closer customer relationships and ensures faster delivery of services and products. This not only enhances the company's stability by spreading market risks but also enriches its expertise across different market dynamics and consumer behaviours.

Risks and concerns

Geographical constrain: The company operates its business operations from its registered office at Ahmedabad, Gujarat and has a presence in North and Central part of India. These states contribute to a substantial portion of its revenues. The company has garnered 67.38%, 48.06% and 47.59% of its total revenue from Gujarat for the year ended on March 31, 2025, 2024 & 2023. Any factors relating to political and geographical changes, growing competition and any change in demand may adversely affect its business. The company cannot assure that it shall generate the same quantum of business, or any business at all, from these states, and loss of business from one or more of them may adversely affect its revenues and profitability.

Significant working capital requirement: The company’s business operations require a significant amount of working capital. In its business, working capital is often required for its day-to-day business operations including managing freight, forwarding and fuel expenses. In the event the company is unable to source the required amount of working capital, it might not be able to efficiently satisfy the demand and preferences of its customers in a timely manner or at all. Even if it is able to source the required amount of funds, it cannot assure that such funds would be sufficient to meet its cost estimates and that any increase in the expenses will not affect its business.

Company may experience the effects of seasonality: The company experiences the effects of seasonality, which may result in its operating results fluctuating significantly. Some of its customers’ businesses are subject to seasonality, which in turn affects its business. For instance, its customers in the Automobile and FMCG industry experience higher demands during festival season in India, and its operations from such customers increase accordingly during such periods. As a result of such seasonality, its quarterly financial results may fluctuate significantly. Accordingly, results for any one quarter are not necessarily indicative of results to be expected for any other quarter and declines in demand during its peak seasonal periods could materially and adversely affect its business, financial condition or results of operations.

Outlook

Iware Supplychain Services is pan-India integrated logistics company providing a wide range of services including warehousing (with third-party logistics (3PL) and carrying & forwarding agent operations), transportation, rake handling services, business auxiliary services, and rental income operating across multiple states in India like Gujarat, West Bengal, Uttar Pradesh, Rajasthan, Punjab, Haryana, and Delhi essentially offering comprehensive supply chain management solutions through their extensive network across the country. On the concern side, the company’s business is dependent on the sale of its services to certain key Industries and certain customers including its Promoter Group Companies. The negative change in industry and/or loss of any of these customers or loss of revenue from sales to these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.

The company is coming out with an IPO of 28,56,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 95 per equity share to mobilize Rs 27.13 crore. On performance front, total income of the company for the year ended March 31, 2025 stood at Rs 8,610.96 lakh whereas in the financial year 2023-24, the total income stood at Rs 5,876.86 lakh, representing a growth of 46.52%. The increase in total income is due to significant growth in the revenue from operation of the company from Rs 5,870.63 lakhs in FY 2024 to Rs 8,582.25 lakhs in FY 2025. Moreover, restated profit after tax for the financial year 2024-25, stood at Rs 801.93 lakh which is 9.31% of the total income, whereas, in FY 2023-24, the profit after tax was Rs 416.96 lakh, representing 7.09% of the total income.

The company maintains good relationships with customers is a most critical factor in its business to keep growing. Through regular interaction with its clients and understanding the client requirements, enables it to not only attract new customers but also leads to recurring business with its existing clients. The company will continue to focus on timely and accurate delivery of quality services which will help in forging strong relationships with its customers and gaining increased business from them.