June 2009: According to general refrain at India Supply Chain Council’s first summit on Private Equity in Logistics, the increased focus on logistics by the authorities, its critical importance in a developing India and the huge investments required, presented a plethora of opportunities for private equity to look at it as a key sector to put in capital and bring in value additions.

However, the general inefficiencies and lack of integration in the sector, among other things, presented their own unique challenges and strategic considerations.

Referring to investment opportunities, Mr Manish Saigal partner at KPMG suggested that PE funds needed to widen their scope and look at areas such as warehousing, cold chains, rail linked logistics, retail logistics, 3PL and coastal shipping, in which they can play a major role in bridging the investment gap. He also called for better alignment of PE and promoter expectations, especially on issues such as valuation, corporate governance, control and participation.

Elaborating on the PE investment process, Mr Shailendra Jindal CEO of Continental Capital Advisors described private equity as medium to long term finance provided in return for an equity stake in potentially high growth, unlisted companies.

Mr. S Sivakumar CEO of Times Private Treaties stressed the importance of branding in the logistics sector, pointing out that the industry shouldn’t just remain confined to the cost and functional platforms, but should strive to occupy many emotional platforms in order to facilitate differentiated branding and brand recall.

Ms Gautami Seksaria, who leads the activities of the India Supply Chain Council, said that "The Private Equity & Logistics Forum created a bold yet informal setting for investors to get a peek into the world of private investment, mergers and acquisitions and to get a first-hand sense of the returns potential of the logistics sector. I do hope that the forum has managed to catalyze relationships that will converge into transactions, successful capital deployment and growth."

Source: Exim News Service