Rapid Multimodal Logistics IPO: A Risky Bet or a Hidden Gem?

Rapid Multimodal Logistics Introduction

Rapid Multimodal Logistics Limited, based in Chennai, specializes in providing comprehensive logistics solutions primarily for the B2B sector. Established in 2020, the company offers end-to-end services across the supply chain, including the transportation of raw materials and finished goods.

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Brief about Rapid Multimodal Logistics

Rapid Multimodal Logistics Summary of the business

We are a Chennai based company engaged in the business of providing one-stop logistical solution to our clients. We cater to the B2B segment of the industry. We provide an end-to-end logistics solution to manufacturers/traders to transport raw materials or finished goods. We are involved in the management and coordination of the movement of raw materials or finished goods throughout the supply chain, from the point of origin to the destination. We provide single as well as multimodal transportation services which involves the coordinated use of multiple modes of transportation (such as road, rail, sea) within a single, integrated supply chain to optimize efficiency and meet the unique requirements of shipments. Right from shipment planning, Route Optimization, Carrier Selection, Documentation, Containerization, Tracking and to Communication and Coordination, Last-Mile Delivery, Performance Evaluation.

Rapid Multimodal Logistics History

Rapid Multimodal Logistics Company was incorporated as a Private Limited Company on July 04, 2020, as “Rapid Multimodal Logistics Private Limited” Vide Registration No. 136171 And Certificate of Incorporation Dated July 04, 2020 Under The Provisions Of The Companies Act, 2013 Issued By The Registrar Of Companies, Central Registration Centre. company has filed Declaration for commencement of business on September 04, 2020. Subsequently pursuant to a Special Resolution of our Shareholders passed in the Extra-Ordinary General Meeting held on October 14, 2023, Company was converted from a Private Limited Company to Public Limited Company and consequently, the name of our Company was changed to ‘Rapid Multimodal Logistics Limited’ and a Fresh Certificate of Incorporation consequent to Conversion was issued on November 06, 2023 by the Registrar of Companies, Chennai. The Corporate Identification Number of Our Company Is U63030TN2020PLC136171.

Rapid Multimodal Logistics Promoters & Board of Directors

• The Promoters of company are Mr. Narayan Agarwal, Mr. Manoj Goel, Mr Summit Agarwal and Ms. Nidhi Agarwal.

Rapid Multimodal Logistics Board of directors

Rapid Multimodal Logistics Share Holding pattern

Rapid Multimodal Logistics Strength

• Versatile Range of Transportation Solutions with Exemplary Route Optimization
• Cultivating Resilient Collaborations with Lorry Vendors
• Optimal Cost Management
• Fostering Long-Term Partnerships
• Word-of-Mouth Acclaim and Informal Advocacy
• Proximity and Accessibility for Clients

Rapid Multimodal Logistics Strategies

Rapid Multimodal Logistics identify and segment the target market based on industry verticals, geographical locations, and specific logistical needs. Rapid Multimodal Logistics have established a user-friendly website, showcasing our services. It put effort in forging strategic partnerships with key players in the logistics ecosystem, including carriers, ports and providers. Rapid Multimodal Logistics collaborate to expand service offerings, enhance capabilities, and increase geographical reach. Rapid Multimodal Logistics implement a robust CRM system to track and manage interactions with clients.Rapid Multimodal Logistics foster strong relationships through personalized communication, timely updates, and addressing specific client needs. Rapid Multimodal Logistics incentivize existing clients to refer new business through referral programs. Word-of- mouth recommendations carry significant weight in the logistics industry. We develop tailor-made logistics solutions based on client requirements. Highlight the ability to provide flexible and customized services that cater to specific industry needs. By integrating these components into a comprehensive marketing and distribution strategy, a multi-modal logistics company can effectively reach its target audience, differentiate itself in a competitive landscape, and build lasting relationships with clients and partners.

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Industry Outlook

INDIAN SERVICE INDUSTRY

The reforms of the 1990s have been associated with the expansion of the service sector in India. Midway through the 1980s, the service sector began to expand, but it took off in the 1990s when India started a series of economic reforms in response to a serious balance of payments issue.

The services sector is not only the dominant sector in India’s GDP but has also attracted significant foreign investment, has contributed significantly to exports and has provided large-scale employment. India’s services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, community, social and personal services, and services associated with construction. To enhance India’s commercial services exports, share in the global services market from 3.3% and permit a multi-fold expansion in the GDP, the government is also making significant efforts in this direction.

The service sector has over 50% contribution to India’s GDP, and it has witnessed a growth of 10.8% during the first half of 2021-22. The service sector has emerged as the highest employment generator with a 5-7% y-o-y growth in 2022.

GOVERNMENT INITIATIVES

The Government of India recognizes the importance of promoting growth in the services sector and provides several incentives across a wide variety of sectors like health care, tourism, education, engineering, communications, transportation, information technology, banking, finance, and management among others.

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• Centre has formulated an ‘Action Plan for Champion Sectors in Services’ to give focused attention to 12 identified Champion Services Sectors.
• India’s tourism and hospitality sector may earn US$ 50.9 billion as visitor exports by 2028.
• As per 2022 University Grants Commission (UGC) statistics, there are a total of 1,072 universities in the country, including 460 state universities, 128 deemed to be universities (a status of autonomy granted to high-performing institutes and universities by the Department of Higher Education), 54 central universities (established by the Department of Higher Education), and 430 private universities.
• The Government of India has adopted a few initiatives in the recent past, some of these are as follows: As of November 9, 2022, the number of bank accounts opened under the government’s ‘Pradhan Mantri Jan Dhan Yojana (PMJDY)’ scheme reached 47.39 crore and deposits in Jan Dhan bank accounts totalled Rs. 1.76 lakh crore (US$ 21.59 billion).
• In October 2021, the government launched a production-linked incentive (PLI) scheme to boost manufacturing of telecom and networking products in India. The scheme is expected to attract an investment of ~Rs. 3,345 crore (US$ 446.22 million) over the next four years and generate additional employment for >40,000 individuals.
• In October 2021, the government launched phase II of the Mahatma Gandhi National Fellowship to empower students and boost skill development.
• In October 2021, the PM Ayushman Bharat Health Infrastructure Mission was launched by the government, to strengthen the critical healthcare network across India in the next four to five years.
• The Indian government is planning to introduce a credit incentive programme worth Rs. 50,000 crore (US$ 6.8 billion) to boost healthcare infrastructure in the country. The programme will allow companies to access funds to ramp up hospital capacity or medical supplies with the government acting as a guarantor.
• Under the Union Budget 2021-22, the government allocated Rs. 7,000 crore (US$ 963.97 million) to the BharatNet programme to boost digital connectivity across India.
• The FDI limit for insurance companies has been raised from 49% to 74% and 100% for insurance intermediates.
• In the next five years, the Ministry of Electronics and Information Technology is working to increase the contribution of the digital economy to 20% of GDP. The government is working to build a cloud-based infrastructure for collaborative networks that can be used for the creation of innovative solutions by AI entrepreneurs and startups.
• The government of India has launched the National Broadband Mission to provide Broadband access to all villages by 2022.

TRANSFORMATION OF THE TRANSPORTATION AND LOGISTICS INDUSTRY

The Indian logistics industry includes all inbound and outbound components of the manufacturing and service supply chains. Significant factors that will increase the demand for India’s logistics sector include the country’s anticipated GDP growth of US$ 26 trillion by fiscal year 2048 (US$ 6 trillion by 2030) and its objective to accelerate merchandise exports to US$ 1 trillion by 2030. This would open a huge opportunity for India’s transport and logistics sector, which is expected to increase at a CAGR of 4.5% from 2022 to 2050, reaching 15.6 trillion tonnes kilometres. The Indian transport and logistics business is expected to be around Rs. 13-16 lakh crore (US$ 156.18-192.23 billion) in 2022.

By 2030, India wants to lower its logistics expenditures from 13-14% of GDP to 8-10% of the GDP. It is projected that a 10% reduction in indirect logistics costs is expected to result in a 5% to 8% increase in exports. According to the Logistics Performance Index (LPI) of the World Bank, India has climbed six positions to reach the position of 38th rank out of 139 nations. The improvement is attributed to a variety of factors, including technological advancement, data-driven decision- making, and legislative initiatives targeted at promoting world-class infrastructure. The National Logistics Policy (NLP) and the PM Gati Shakti programme are significant overarching policy moves taken by the central government in this area to deliver outcomes by 2024-25.

Logistics Industry is crucial to both enterprises and the economy. In today’s interconnected world, shipping and logistics are at the heart of the economy, acting as vital gateways for international trade and business. A nation with a strong and effective logistics sector offers an efficient forward and reverse flow of goods and services, which eventually translates to fast-paced growth.

TRANSPORTATION AND LOGISTICS LANDSCAPE IN INDIA

• Transportation
  • Surface Transportation
    • Transport and logistics refer to the procedures involved in the manufacture, storage, inventory, delivery, and distribution of specific commodities or services. The logistics sector in India was predicted to account for 14.4% of GDP in 2022. It is the primary source of income for more than 22 million people. The overall logistics sector in India includes 37 export promotion councils, 40 Participating Government Agencies (PGAs), 20 government agencies, 10,000 goods, and 500 certifications. Between the financial years 2015-16 to 2019-20, India invested approximately US$ 10.2trillion in the development of infrastructure.
    • The freight movement in India is significantly prejudiced towards road transportation, which transports 66% of goods (in ton-kilometres). This is followed by rail (31%), shipping (3%), and air (1%). To facilitate cargo transportation, India has a vast network of support infrastructure, including 129+ inland container depots, 168+ container goods stations, and 300 m sq. ft. of warehouse capacity.
    • The logistics sector in India can be divided into the following categories:
      • The surface transport sector is anticipated to experience the fastest growth in India’s infrastructure sector, with a CAGR of more than 8% in 2020. Additionally, the trucking sector is very unorganised and fragmented. Less than five trucks make up the fleet of 70% of the truck owners in the industry. Through different asset monetisation techniques and funding through Special Purpose Vehicles, the Ministry of Road Transport and Highways (MoRTH) is working to reach a target of over Rs. 40,000 crore (US$ 4.80 billion) for the current financial year (2023-24). The road network in India has risen from 62.15 lakh km in FY21 to 63.73 lakh km by January 2023. The transportation sector can be further divided into the following categories:
      • Full Truck Load (FTL)
        • The FTL market contributes significantly to the Transportation sector. The FTL market was anticipated to be around US$ 120 billion in 2021. It is expected to increase at a rate of 7-8% in the upcoming years (2022 onwards).
      • Part Truck Load (PTL)
        • In terms of revenue, the PTL ranks as the second-largest contributor to the Indian surface transportation industry. In 2021, it was expected to be worth approximately US$ 12 billion, with an annual growth rate of 8-10%. Part truckload services are becoming increasingly popular around the country.
      • Express
        • While India has less than 2% of the global express business, it has one of the fastest-growing express industries. The Indian Express market is fragmented, and there are reportedly 1,000 active players. The domestic express market is dominated by approximately 15 large competitors. The remaining players range in size from small to medium- sized enterprises. The sector was expected to grow at a CAGR of around 15% by 2020, reaching US$ 5.5 billion.
  • Railways
    • India has the world’s fourth-largest rail network and accounts for the second highest percentage of goods moved in terms of volume. From April to September 2023, a total freight loading of 758.20 million tonnes (MT) was obtained, compared to a loading of 736.68 MT the previous year, representing a rise of around 21.52 MT. During September 2023, Indian Railways loaded 59.70 MT of coal, 14.29 MT of iron ore, 5.78 MT of pig iron and finished steel, 6.25 MT of cement (excluding clinker), 4.89 MT of clinker, 4.54 MT of foodgrains, 4.23 MT of fertiliser, 4.0 MT of mineral oil, 7.28 MT of containers, and 10.10 MT of rest of all other goods. The average speed of freight trains on the Dedicated Freight Corridor (DFC) will more than double with the inauguration of DFC. In 2021, India pledged to invest Rs. 3 lakh crore (US$ 36.04 billion) in the Dedicated Freight Corridor (DFC) to build dedicated rail tracks and related infrastructure for the transit of goods trains.
  • Waterways
    • India has a 7,500 km (4,660 miles) coastline that is encircled by the sea on three sides. India has 200 minor/intermediate ports and 12 big ports, which together, account for 65% of the country’s total value and 95% of its volume of trade. The Indian coast offers a huge opportunity for the movement of cargo. By 2025, total cargo movement is estimated to exceed 250 MTPA. Commodities including petroleum, oil, lubricants, building supplies, and dry bulk cargo like cereal grains, fertiliser, steel, coal, and minerals are ideal for coastal transportation. On December 15th, 2021, the Government of India (GoI) pledged to invest Rs. 3-3.5 lakh crore (US$ 38-44 billion) across ports, shipping, and in-land waterways under the Maritime India Vision (MIV), which would help unleash Rs. 20,000 crore (US$ 2.40 billion) in potential annual revenue for Indian ports. Indian Government plans to replace diesel with electricity for at least half of the vehicles and equipment needed by the major ports by 2030 and to increase that number to 90% by 2047. The shipping ministry wants ports to build at least one liquified natural gas (LNG) bunkering station by 2030 and electric vehicle charging facilities near port areas by 2025 to decrease the usage of petrol. Moreover, the major ports collectively handled a record- breaking 795 million tonnes of cargo in 2022-23, registering a 10.4% growth over the previous year.
  • Airways
    • Airways account for less than 2% of the total modal mix. The materials transported by air for freight movement are primarily time-sensitive commodities such as pharmaceuticals, healthcare, electronics, etc. Airways are not recommended for non-time-sensitive freight movement of commodities since they are more expensive than other means of transportation. As of June 30th, 2023, the Regional Air Connectivity Fund Trust (RACFT) has released Viability Gap Funding (VGF) amounting to Rs. 2,729.11 crore (US$ 333 million) to the selected airline operators for the operation of the Regional Connectivity Scheme (RCS)-UDAN (Ude Desh ka Aam Nagrik) Scheme. 479 routes are in operation, connecting 74 airports, including two water aerodromes, and nine heliports, based on the four rounds of bidding under UDAN. The Scheme has benefitted around 123 lakh passengers.
    • Dedicated Air cargo: These are specifically designed freighters for air cargo.
    • Belly Cargo Movement: This cargo movement is commonly done in the belly of commercial planes.
• Warehousing Industry
  • A warehouse is an essential component of corporate infrastructure and one of the primary enablers in the global supply chain. the Indian warehousing market is predicted to reach Rs. 2,872.10 billion (US$ 34.50 billion), expanding at a CAGR of 15.64% from 2022 to 2027. With increased demand and supply throughout the years, the Indian warehousing industry is gaining traction. The key players are third-party logistics (third-party logistics) and e-commerce enterprises, which are growing into tier 2 and 3 cities and eventually increasing their proportion of secondary marketplaces. With a market share of more than 60%, 3PL and e-commerce are the largest lessors of storage space. To assist this expansion, the government is building multimodal logistic parks and other projects that connect urban transit to railways, attracting investments from institutional funds and developers.
• Value Added / Other Services
  • Value-added/other services include a variety of operations such as customs clearing, Logistics packaging, Inventory management, Material handling equipment, etc.
• Custom clearing
  • Customs clearance is a time-consuming and difficult process that necessitates much documentation and coordination. However, many established businesses and startups nowadays are utilising technological platforms to streamline this process. Customs automation has aided industry and made operations more efficient.
• Freight Forwarding
  • Freight forwarding is the business of organizing shipments for individuals or corporations to move commodities from the manufacturer to an international buyer. The freight forwarder serves as a liaison between the liner and the shipper. A freight forwarder streamlines the procedure and provides the customer with an estimated price rate after adding his margin.
• Logistics Packaging
  • Packaging is an essential component of the overall supply chain. Proper packaging services are essential for businesses before the goods are delivered to the customer.

KEY TRENDS

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• Green logistics technology
  • The use of green logistics technology, such as tools for measuring the climate, real-time data collection tools, electric vehicles, green cold chain solutions, electric cargo delivery drones, and platforms for managing logistics resources, can have a variety of advantages, such as decreasing waste, streamlining procedures, boosting an organization’s competitiveness, and being environmentally friendly. Several businesses, including Spencer, Bigbasket, Amazon, Licious, Myntra, and Flipkart, have joined forces with Zypp Electric for their last-mile delivery through e-vehicles and e-vehicle fleet management.
• Embracing digital ecosystems
  • Ecosystem collaboration
    • Collaboration among technology providers, logistical service providers, and customers backing innovation, knowledge sharing, and the acceleration of digital transformation. Collaborative ecosystems offer seamless integration, streamline processes, and provide greater consumer experiences.
  • Supply chain orchestration
    • End-to-end supply chain orchestration is facilitated by advanced platforms and digital markets. By utilising these platforms, businesses are able to connect with a large network of suppliers, transporters, and service providers, which helps to streamline logistics processes and shorten time-to-market.
  • Rise of cross-border e-commerce
    • The rapid expansion of e-commerce has had a tremendous impact on the logistics business, resulting in a surge in demand for foreign goods and MSMEs selling in the international markets. The growth is being driven by millennials, who make up a major share of the professional purchasing decision market and anticipate online shopping interfaces. As a result, efficient and dependable delivery services have become essential, resulting in the creation of cross-border digital markets with significant economic growth.
• Technological innovation
  • Artificial intelligence (AI) and machine learning (ML)
    • AI-powered algorithms and machine learning models enable predictive analytics, demand forecasting, route optimisation, and real-time decision-making. These solutions enable organisations to optimise their supply chains, better allocate resources, and provide better consumer experiences.
  • Internet of Things (IoT)
    • With the proliferation of IoT devices, logistics organisations have increased visibility and control over their assets and inventories. Real-time tracking, remote monitoring, and predictive maintenance are made possible by IoT sensors and connectivity, allowing proactive and efficient logistics operations.
  • Robotics and automation
    • Automation technologies such as robotic process automation (RPA) and autonomous vehicles are altering warehouse operations and last-mile delivery. Robotics automates repetitive operations, minimises errors, increases speed, and improves safety, resulting in cost savings and higher output.

Rapid Multimodal Logistics Business Data

Rapid Multimodal Logistics operating Verticals

• ROAD FREIGHT
• RAIL FREIGHT
• COASTAL SHIPMENT

Rapid Multimodal Logistics Product wise break-up

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Rapid Multimodal Logistics Revenue contribution from Geography presence

(% of total revenue)

Rapid Multimodal Logistics Customer dependency

Rapid Multimodal Logistics Supplier dependency

Rapid Multimodal Logistics Competition

Emerging from an unorganized sector, Rapid Multimodal Logistics venture into the dynamic multimodal logistics industry has immersed us in the intense competition of both domestic and international spheres. Amidst a landscape teeming with a myriad of logistics service providers, from global powerhouses with expansive networks to agile regional entities and specialized firms, our competition extends beyond similar services to encompass entities focusing on specific transportation modes. The relentless rivalry between global logistics giants armed with substantial resources and local players capitalizing on market insights and personalized services adds a layer of complexity. Rapid Multimodal Logistics strategic edge lies in technological investments, leveraging real- time tracking, predictive analytics, and automation to bolster operational efficiency and elevate service standards. Navigating the ubiquitous price competition, we relentlessly optimize costs while upholding unwavering service excellence. The significance of supply chain visibility cannot be overstated, with our real-time tracking and inventory insights providing a decisive competitive advantage. Strategic alliances with transportation entities, ports, and customs brokers amplify our capabilities, extending our competitive reach. Prioritizing customer satisfaction, fostering robust relationships, and effective communication are instrumental in client retention and positive referrals. Our array of specialized services, spanning temperature-controlled logistics to hazardous materials handling, establishes a distinctive

Peer companies comparison to Rapid Multimodal Logistics

Rapid Multimodal Logistics SWOT ANALYSIS

• STRENGTHS
  • Versatile Transport Alternatives: Offering an extensive array of transportation options to cater to diverse client needs.
  • Robust Collaborations with Vendors: Cultivating strong and reliable partnerships with lorry vendors, ensuring a dependable supply chain.
  • Expertise in Streamlining Routes: Demonstrating proficiency in optimizing routes for efficiency, reducing transit times and costs.
  • Strategic Alliances with Unions: Establishing strategic partnerships with labor unions to ensure operational resilience and workforce stability.
• WEAKNESSES
  • Reliance on Vendor Dependability: Mitigating potential challenges arising from reliance on specific lorry vendors by diversifying and ensuring redundancy.
  • Constrained Door-to-Door Container Services: Addressing limitations in door-to-door services by exploring innovative solutions to enhance reach and convenience.
  • Complexity in Coordination: Streamlining coordination efforts for multiple transportation modes through the implementation of advanced logistics management systems.
• OPPORTUNITIES:
  • Exploration of New Markets: Seizing opportunities in unexplored markets by introducing specialized services tailored to local demands.
  • Integration of Cutting-edge Technology: Strategically investing in advanced technology for real-time tracking, data analytics, and operational optimization to stay ahead in the industry.
  • Embracing Sustainable Logistics Practices: Capitalizing on the increasing demand for eco- friendly logistics by incorporating and promoting sustainable practices in operations.
  • Growing E-commerce Market: Leveraging the booming e-commerce industry to handle the escalating demand for efficient and timely deliveries.
• THREATS:
  • Intense Competition: Adopting differentiation strategies, focusing on exceptional service quality and client relationships to stand out in a highly competitive market.
  • Rising Operational Costs: Implementing cost-control measures, negotiating contracts, and exploring fuel-efficient technologies to counter the impact of rising operational costs.
  • Technological Disruptions: Proactively embracing and integrating emerging technologies to stay ahead of potential technological disruptions in the logistics landscape.
  • Global Economic Uncertainties: Implementing agile business strategies and diversifying service offerings to mitigate the impact of economic downturns and global uncertainties.
  • Security Concerns: Strengthening cybersecurity measures and implementing robust security protocols to safeguard against potential cyber threats and ensure the integrity of logistics operations.

Rapid Multimodal Logistics Business risk factors

• Rapid Multimodal Logistics depend significantly on clients from different industries and are highly dependent on the performance of their industry. A loss of, or a significant decrease in their business could adversely affect our business and profitability.
  • Rapid Multimodal Logistics depend significantly on clients operating in the Iron and Steel, Paper, Gypsum Board, Tiles & Sanitary industries in India. Clients operating in the abovementioned industry contributed 21%, 19%. 17% and 17% respectively to our total revenue from operations in Fiscal 2023.
• Rapid Multimodal Logistics depend significantly on our vendors to provide transport facilities. A loss of, or a significant decrease in services provided by our vendors could adversely affect our business and profitability.
• Rapid Multimodal Logistics have collaborated as a Business Associates with M/s Container Corporation of India Limited (CONCOR). Any disruption in renewal of tie up agreement may adversely affect our business.

Rapid Multimodal Logistics Financials

Rapid Multimodal Logistics Key Financial Ratios

Rapid Multimodal Logistics Key Performance Indicators

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Rapid Multimodal Logistics Balance Sheet

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Rapid Multimodal Logistics Profit & Loss

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Rapid Multimodal Logistics Cash Flow

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Rapid Multimodal Logistics Capital structure

Rapid Multimodal Logistics IPO Details

Rapid Multimodal Logistics IPO Details

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Litigation involved in Rapid Multimodal Logistics

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