Warburg Pincus-backed Stellar makes Indian logistics bolt-on
Stellar Supply Chain Solutions, an Indian logistics company backed by Warburg Pincus, has taken control of refrigerated trucking specialist Kelvin Cold Chain.
Financial terms and percentage holdings were not disclosed. Kelvin's existing private equity backer, Ambit Pragma, will retain a minority stake.
"The investment into Kelvin augurs well for our mission of bringing about a value chain transformation for consumer businesses in India," said Stellar Value Chain founder and CEO Anshuman Singh, according to The Economic Times. "We will significantly augment Kelvin's management, implement new technology tools and raise the quality of product handling."
Warburg Pincus agreed to invest up to $125 million in Stellar last year as part of a plan to pursue consolidation opportunities in India's expanding logistics sector. In addition to cold chain transportation, the company aims to diversify its operations into segments including multi-user modern warehousing, primary and secondary distribution and e-fulfilment.
Founded in 1996, Kelvin operates a fleet of more than 180 trucks in five major urban hubs, including Delhi, where it maintains a refrigerated warehouse. The company is planning to expand trucking services into five additional regions in 2017 and establish a number of new storage facilities. It claims nationwide delivery coverage has increased 30% over the past year to more than 72,000 kilometers a day.
Other investments by Warburg Pincus in Indian logistics include the formation of a $250 million joint venture with industrial parks developer Embassy Group and a commitment of about $130 million to Ecom Express, a company focused on e-commerce distribution. In November, the firm invested $75 million in trucking company Rivigo.
The sector is estimated to be worth about $130 billion and is expected to grow rapidly with the introduction of more professionalized international supply chains. Recent private equity activity in this space otherwise includes a $13 million round of funding last week for warehousing industry supplier Leap India.
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