Blue River backs Indian logistics company

The Mumbai-based private equity firm hopes to capitalise on opportunities in the sector provided by rapidly growing international trade.

Blue River Capital, an Indian private equity firm, has taken a minority stake in logistics company Wilson Sandhu for $12 million (€7.7 million).

Wilson Sandhu Logistics is an international freight forwarding and third-party logistics company with more than 50 branches in India and an agency network in more than 30 countries, primarily in Asia and Europe. The company manages cargo transportation by land, sea and air for customers from various industries, providing freight forwarding, container leasing and ship chartering.

Shujaat Khan, managing director of Blue River Capital, told PEO the investment in Wilson Sandhu was made because the company is primarily focussed on international trade. As India is becoming more closely integrated into the world economy, international trade involving the country is on the increase. Consequently, Wilson Sandhu is in a position to capitalise on the benefits of larger amounts of trade. “Logistics companies benefit significantly from trade growth,” he said.

Khan said that another aspect of Wilson Sandhu viewed as favourable by Blue River is that it employs an asset-light business model which is basically involved in point-to-point logistics.

The firm will seek acquisition opportunities in the logistics space and look to roll them into Wilson Sandhu, he added.

Blue River Capital is investing out of its $135 million fund, focussed on making growth capital investments in India. The fund invests in rapidly growing companies, providing them with expansion capital. It is normally “the first positional investor” in any company or business, Khan said.

The firm invests primarily in financial services, consumer-driven industries, infrastructure-related companies and broader outsourcing-related businesses.

According to Khan, about $90 million of the fund’s capital has been deployed thus far in seven deals. Some of the firm’s other investments include Chennai-based City Union Bank; KMC Constructions, a company that specialises in the construction of highways, airport runways and bridges; International Print-O-Pac, a paper board packaging and printing solutions company; and Rane Holdings, an automotive components manufacturer.

Blue River is planning to launch a second fund in the latter half of 2008.