Saurashtra Freight (SFPL), a subsidiary of Prem Watsa led Fairfax India Holdings (FIH), operates the leading Container Freight Station at Mundra Port and is FIH’s platform company for the Indian Logistics Sector. Along with SFPL, FIH has invested more than USD 5 Billion in India across various sectors.
Under the dynamic leadership of Raghav Agarwalla, Saurashtra has deployed innovative strategies to achieve high growth in both revenue and profitability. Now, SFPL has established a first-in-class incubator and earmarked funds of USD 50 Million for investments in domestic and exim logistics. “The incubator will enable Saurashtra to foray into the budding domestic logistic industry which includes 3PL, Warehousing, Last mile delivery and cold storage to name a few. A lot of focus is given to disruptive ideas with profitable and free cash flow business models and not models which sacrifice profitability for scale. This platform shall ensure sustainable returns for all stakeholders. Saurashtra has always had a long term view on earnings. Sustainable growth is at the core of who we are. We have never chased valuations and never will.” said Raghav Agarwalla, Managing Director.
Saurashtra’s first successful incubation is a niche container shipping line which has posted profits in its first year of operations. SFPL’s Incubator has generated significant interest in the past 8 months and is in the due diligence stage with 3 companies, spread across the country.
Speaking on this new initiative, Shivang Kagzi, VP – Corporate Investments, SFPL, said, “There are many Professionals in the Logistic Industry who have created and grown fantastic companies but unfortunately have not been able to create wealth for themselves due to the lack of ESOP/equity participation. That’s where Saurashtra can help. With a dedicated treasury, our investee companies will receive long-term patient capital & sweat equity”.
Raghav Agarwalla, Managing Director, added “Our focus is on healthy businesses that are run by honest, hardworking entrepreneurs. That is what we are looking for in our investee companies. We are not looking to micro-manage. The entrepreneurs know their business inside out and we trust them to manage day to day operations with complete freedom to deliver sustainable earnings.”
The Logistics Sector in India is poised to grow at over 20%. For every percent growth in GDP – Logistics in India grows at 1.5-2 times. The logistic cost as a percentage of GDP is 13% in India as against 8.5% in USA. The Indian logistics sector is highly fragmented with ~90% share of business with the unorganized segment. As a result, there are few integrated logistics companies in India.