Published On:July 5 2022
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NDR Warehousing to invest over Rs. 2,000 crore to expand assets portfolio in 2 years.

Logistics infrastructure major NDR Warehousing is planning to invest more than Rs. 2,000 crore to develop its portfolio of warehousing and industrial parks over 20 million square feet in the next 24 months, a senior executive said.

The company, backed by global investment manager Investcorp, is also looking at inorganic growth options and joint ventures to expand its portfolio.

“This investment will help the company to expand presence in Pune and NCR (National Capital Region) markets and will be leveraging the funds to grow inorganically by acquiring land as well as warehouses,” Krishnan S Iyer, executive director at NDR Group, told ET.

The company is already in discussions with various parties to acquire both land for greenfield development and operational warehouses, he said.

“We are looking forward to clocking revenue growth of about Rs. 250-260 crore in FY23 and emerging as the second largest warehousing player in the country,” Iyer said.

According to him, the company is poised to grow at a compounded annual growth rate (CAGR) of 19-20% in the backdrop of the growth opportunities in warehousing space in the country.

It is planning to raise $200 million, or around Rs. 1,580 crore, through private or public markets to support its proposed growth plans. It is looking to engage with investment banks for this fund raising through both equity and debt instruments.

Earlier this year, Investcorp led a $55-million, or over Rs. 411-crore, investment in NDR Warehousing through a convertible instrument.

NDR Warehousing holds 150 acres of land in Mumbai, Chennai, NCR and Bengaluru. It has 12 million sq ft operational assets comprising 18 logistics parks spread across over eight cities including Chennai, Mumbai, NCR, Bengaluru, Coimbatore, and Kolkata.

Apart from peripheral locations of captive tier I cities, the company is also considering tier II cities following the response to its largest warehousing facility at Coimbatore. In the immediate future, the company has Guwahati and Lucknow on its radar, Iyer said.

Construction of additional warehousing space spread over 3 million sq ft is underway, where some of its key clients have already signed up. Several of its existing tenants are also in talks to pick up additional warehousing space at its facilities. Its clients include corporates such as Reliance Industries, Dabur India, DHL, Lifestyle and Apollo Tyres NDR Group, led by Amrutesh Reddy who is part ofpromoter group and managing director of the company, entered the business of godowns and warehouses in the 1950s. It is the first to be granted a private sector bonded warehousing license in the country, first to get into private freight terminals, and one of the first ones to set up container freight stations across the country.

The warehousing segment has been attracting interest from institutional investors, with more than $5 billion funds committed by private equity firms and pension funds such as CPPIB, Warburg Pincus, and Ivanhoe Cambridge over the past five years.

Global investors such as Morgan Stanley have also come back into Indian properties and bought controlling stakes in warehousing projects recently.

The warehousing and logistics segment of real estate, which has emerged as relatively risk immune to the shocks of Covid-19, is expected to gain further strength and attract more investments in the next couple of years.

Transactions for the warehousing segment are estimated to grow at a CAGR of 20% to 45.9 million sq ft in 2022-23 from 31.7 million sq ft in 2020-21. The share of ecommerce entities in the total transaction volume is projected to increase to 36% from 31% during this period.

A favourable regulatory environment, along with the government’s support through policy and reforms, has started to boost spending in infrastructure and in turn the overall demand for modern warehousing.

ET





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