Sahara Maritime
- Sahara Maritime has come out with an initial public offering (IPO) of 8,49,600 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 81 per equity share.
- The issue will open on December 18, 2023 and will close on December 20, 2023.
- The shares will be listed on BSE SME platform.
- The share is priced 8.10 times higher to its face value of Rs 10.
- Book running lead manager to the issue is Swaraj Shares and Securities.
- Compliance Officer for the issue is Stallone Marshal Gonsalves.
Profile of the company
The company is registered with Director General of Shipping, Ministry of Shipping, Government of India to act as Multimodal Transport Operator, and is an ISO 9001:2015 certified Freight Forwarder. The company specializes in sea freight forwarding. The company’s Promoters Sohrab Rustom Sayed and Nadeem Aboobakar Hira, with over two decades of experience in the logistics industry have been the guiding force behind all the strategic decisions of the company. It caters services mainly in the domestic market specifically in the state of Maharashtra.
The company offers its customers a comprehensive range of freight-related services, along with ancillary transport management. Additionally, it has established informal partnerships with various intermediaries to provide ancillary services such as Transportation, Multimodal Transportation, Project cargo handling, Third Party Logistics, Packaging, loading/unloading, and unpacking of items. These additional services enable it to provide end-to-end solutions and other value-added services that cater to its customers’ diverse needs. The company understands that each customer has unique shipment requirements, and it prioritizes building personal relationships with them to better understand their individual needs. To meet these needs, the company has proactively outsourced vendors and established partnerships, allowing it to offer a wide range of services at competitive prices. This asset-light business model grants its the flexibility to develop tailored logistic solutions across diverse industries while ensuring scalability of services.
The company’s primary objective is to ensure the safe transportation and delivery of goods from start to finish. It achieves this by leveraging its expertise to identify and recommend the optimal solution for each client’s specific business environment. Its dedicated team of skilled shipping and customs specialists works diligently to provide clients with customized solutions at affordable rates. Strengthening customer relationships and consistently delivering quality products, services, and solutions are at the core of its mission.
Proceed is being used for:
- Funding of capital expenditure requirements of the company towards purchase of: (i) commercial vehicles; and (ii) Office Equipment’s
- Working capital requirements
- General corporate purposes
Industry Overview
The tertiary sector of the economy (also known as the services sector or the service industry) is one of the three economic sectors, the others being the secondary sector (approximately the same as manufacturing) and the primary sector (agriculture, fishing, and extraction such as mining). For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialised countries. This shift is called tertiarisation. The tertiary sector is now the largest sector of the economy in the world, and the fastest-growing sector. The services sector of India remains the engine of growth for India’s economy and contributed 53% to India’s Gross Value Added at current prices in FY21-22 (as per advance estimates). India’s services sector GVA increased at a CAGR of 11.43% to Rs 101.47 trillion ($1,439.48 billion) in FY20, from Rs 68.81 trillion ($1,005.30 billion) in FY16. Between FY16 and FY20, financial, real estate and professional services augmented at a CAGR of 11.68% (in Rs terms), while trade, hotels, transport, communication and services related to broadcasting rose at a CAGR of 10.98% (in Rs terms). India’s IT and business services market is projected to reach $19.93 billion by 2025. In September 2022, the Manufacturing Purchasing Managers’ Index (PMI) in India stood at 55.1. With the fastest growing (9.2%) service sector globally, the sector accounts for 66% share in India's GDP and generates about 28% of the total employment in India.
The Maritime Sector in India comprises of Ports, Shipping, Shipbuilding and Ship repair and Inland Water Transport Systems. In India, there are total 12 government owned major ports and approximately 2 0 0 mi nor and intermediate port. These all are administered by the central and the States government. Indian Shipping Industry has over the years played a crucial role in the transport sector of India’s economy. Approximately 95% of the country’s trade by volume and 68% by value is moved through Maritime Transport. Therefore, shipping and shelves of the mainland and also along the Islands. It is an important natural resource for the country’s trade.
The shipping industry is one of the most globalized industries operating in a highly competitive business environment that is far more liberalized than most of the other industries and is, thus, intricately linked to the world economy and trade. Shipping plays an important role in the transport sector of India’s economy, especially in EXIM trade. Approximately 95% of the country’s trade in terms of volume and 68% in terms of value is moved by sea. India’s shipping tonnage was only 1.92 lakh Gross Tonnage (GT) on the eve of independence. Now India has one of the largest merchant shipping fleets among the developing countries and ranks 17th amongst the countries with the largest cargo-carrying fleet of 1411 vessels of 12.79 million G.T. as on April 30, 2019, and an average age of the fleet is 18.03 years. Indian maritime sector facilitates not only the transportation of national and international cargoes but also provides a variety of other services such as cargo handling services, shipbuilding, ship repairing, freight forwarding, lighthouse facilities, and training of marine personnel, etc. Keeping in view the Government’s policy of strengthening and promoting the Indian maritime sector in a competitive framework, the Ministry of Shipping has initiated a number of reforms towards the minimum government, and maximum governance to give a fillip to the Sector.
Pros and strengths
Diversified revenue sources and customer base: The company offers a range of logistic and related services, making it a one stop logistics solution for customers for export of their products. Such range of services eases the gives its customers the comfort of outsourcing a substantial quantum of their logistics management to it. The company’s client-base across various industry verticals has enabled it to leverage the knowhow that it has acquired from its experience with a set of clients across a wider spectrum.
Comprehensive solution for logistics requirement: The company is providing comprehensive third-party logistics services, end-to-end customized logistics solutions to its clients. The company focuses on attaining highest level of customer satisfaction.
Customer oriented approach: The business of the company is customer oriented and always strives to maintain good relationship with the customers. The company provides quality services which ensure that customers are satisfied with the services and does not have any complain.
Risks and concerns
Geographical constrain: Entire portion of the company’s total sales for the period ended September 30, 2023 are made in the region within the State of Maharashtra. Due to such geographical concentration of its business in this region, heightens its exposure to adverse developments related to competition, as well as economic and demographic changes in this region which may adversely affect its business prospects, financial conditions and results of operations. Factors such as competition, regulatory regimes, business practices and customs, industry needs, transportation, in other markets where it may expand its operations may differ from those in which it is currently offering. In addition, the company may enter new markets and geographical areas, and are likely to compete not only with national players, but also local players who might have an established local presence, are more familiar with local regulations, business practices and industry needs, have stronger relationships with local distributors, dealers, relevant government authorities, and are in a stronger financial position than the company, all of which may give them a competitive advantage over it. The company’s inability to expand into areas outside Maharashtra market may adversely affect its business prospects, financial conditions and results of operations.
Depends on third-party intermediaries for logistic and transport: The company’s services encompass freight forwarding in sea freight. Additionally, it depends on third-party intermediaries for Logistic, transport management and freight-related services etc. for carrying out its business operations to provide ancillary services such as Transportation, Multimodal Transportation, cargo handling, cargo handling, packing etc. These additional services enable it to provide end-to-end solutions and other value-added services that cater to its customers’ diverse needs. The company cannot assure that it will be able to maintain amicable relations with its intermediary or continue to renew the arrangements with these third parties on terms that are commercially acceptable to it, or at all. The company cannot assure that such third parties shall fulfil their obligations under such agreements entirely, or at all, shall not breach certain terms of their arrangements with us, including with respect to payment obligations, or shall not choose to terminate their arrangements with the company. These may lead to loss of its key intermediaries thereby adversely affecting its business and results of operations.
Competition from various international/domestic third-party logistics companies: While the logistics industry in India is generally fragmented, the company may face competition from a number of international and domestic third-party logistics service providers, especially as the trend toward larger-scale logistics providers in India continues. Some of its competitors may have significantly greater financial and marketing resources and operate larger networks than it does. In the regions of India in which it operates, it faces competition from certain regional logistics services providers and the un-organised sector, some of which have market presence in their respective areas of operation. It may also face competition from new entrants into the logistics service industry. If it cannot maintain, or gain, sufficient market presence or are unable to differentiate ourselves from its competitors, it may not be able to compete effectively.
Outlook
Sahara Maritime is a non-governmental organization that provides transportation, storage and communication services for maritime needs. The company offers a range of freight services to its clients, which includes transportation management. The company has partnered with various intermediaries to provide additional services such as multimodal transportation, project cargo handling, third party logistics, packing, loading and unloading of items. On the concern side, the company generates its entire portion of sales from its operations in the geographical regions within Maharashtra and any adverse developments affecting its operations in this region could have an adverse impact on its revenue and results of operations. Moreover, significant increases in freight, transportation and other costs may materially and adversely affect its business, financial condition and results of operations.
The company has come out with an IPO of 8,49,600 equity shares of Rs 10 each at a fixed price of Rs 81 per share to mobilize Rs 6.88 crore. On performance front, the company’s revenue from operations was increased by 24.03% to 2,609.95 lakh for the FY 2023 from Rs 2,104.23 lakh for the FY 2022 due to increase in its Freight Charges by Rs 121.72 lakh, THC & B/L Documentation Charges by Rs 58.89 lakh, by Congestion Surcharge of Rs 290.83 lakh and Clearing & Forwarding Charges by Rs 34.28 lakh in FY 2023. Moreover, the company’s Profit after Tax increased by 130.64% to Rs 120.74.56 lakh in FY 2023 from Rs 52.35 lakh in FY 2022.
Going forward, the company offers a wide range of solutions including multi modal transportation for that it has approval to act as ‘Multimodal Transport Operator’ from Ministry of Shipping, Directorate General of Shipping, Government of India, and distribution, warehousing, in-factory logistics and other value-added services. The company’s integrated, end-to-end logistics services focus on creating solutions that address the requirements of its client. This shall help it to cater and to expand its customer base and increase its revenue from operations. The company is well poised to leverage the opportunity this industry offers. The company shall continue to strive to offer qualitative and diverse products to meet evolving preferences of customers.
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