Mumbai: Bhoruka Logistics Pvt. Ltd, a Mumbai-headquartered logistics firm, is in talks to raise Rs.100 crore from private equity (PE) and strategic investors, said two people aware of the development.

Bhoruka Logistics offers dry and cold chain solutions on a pan-India basis.

“Bhoruka Logistics is in advanced stages of discussion with investors to raise up to Rs.100 crore from private equity and strategic investors. Discussions are at an advanced stage with three-to-four investors,” said one of the two people mentioned above, requesting anonymity as the talks are private.

Strategic investors are interested in picking up at least 51% stake, which would also include picking up some stake from promoters, he said, adding that a deal with a PE investor would be for a minority stake in the company.

“However, a final decision to go with a strategic or PE investor is yet to be taken. The same is expected to be finalized within a couple of weeks by the promoters,” he said.

Bhoruka Logistics is a closely held company founded by Subhash Agarwal almost 35 years ago. Currently, it is managed by Agarwal family members Rahul and his brother Kunal Agarwal.

According to the company’s website, it has a fleet of over 300 trucks and 51 warehouses.

“They ventured into the cold chain logistics space around two-to-three years ago under the brand, KoolEx, and they have seen significant traction in this business. Unlike some of the other cold chain players who are targeting food, agri, and QSR (quick service restaurant) sectors, Bhoruka has been focusing on pharmaceuticals and biotech companies,” said the second person cited above, also requesting anonymity.

They have significant expertise in serving pharma customers, which cannot be easily replicated given the quality standards demanded by these clients, he said, adding that this strength of the company is an attraction for investors.

The company has a long list of clients that includes companies like Sun Pharmaceutical Industries Limited, Cadila Healthcare Ltd, Wockhardt Ltd, GSK Pharma, Pfizer Ltd, Bayer and Novartis India Ltd. The company registered revenues of about Rs.95 crore in 2015, as per filings with the Registrar of Companies.

Bhoruka is being advised by Torchbearer Advisors, a Mumbai-based boutique investment bank, said the second person.

Emails sent to Rahul Agarwal, managing director at Bhoruka Logistics, went unanswered. Nikhil Dawda, the founder of Torchbearer Advisors, declined to comment on the development.

“With GST (goods and services tax) almost a reality, logistics businesses, particularly cold chains and warehousing, are expected to see significant growth in the near future,” said Sanjeev Krishnan, partner and leader (private equity and transaction services), PwC India.

Logistics has remained an attractive sector for PE investments as it is considered a proxy for overall economic growth.

In the past five years, the logistics space has seen private investments worth around $1.17 billion across 74 investments, according to data from VCCEdge, the financial research platform of VCCircle.com.

In 2015 alone, $418 million was invested in the sector, driven primarily by the e-commerce boom, data show.

In February, private equity fund Asia Climate Partners announced it is picking up a stake in cold chain logistics firms ColdEX Logistics Pvt. Ltd. In July 2015, Mint reported that Continental Warehousing Corp. (Nhava Seva) Ltd, a logistics company backed by private equity firm Warburg Pincus, was in talks with PE funds to raise up to $100 million.

The government has said it plans to implement GST by 1 April 2017. The tax reform is expected to be a significant boost for the logistics industry.

Mid-tier businesses in the segment would be expected to raise limited amounts of capital, make it work and depending on how metrics pan out, re-evaluate business and funding strategies in due course, he added.