Bain Capital in talks to invest Rs 1,500 crore in JM Baxi Group co

Mumbai: Global private equity fund Bain Capital is in advanced talks with JM Baxi Group to invest as much as Rs 1,500 crore ($200 million) for a 30% stake in stepdown subsidiary International Cargo Terminals & Rail Infrastructure (ICTRIPL), according to people aware of the matter.

Part of the proceeds may be used to reduce debt and fund expansion. The Mumbai-based JM Baxi Group had raised promoter-level debt of Rs 500 crore from Piramal Finance in 2017 and it falls due in FY23.

ICTRIPL is a unit of International Cargo Terminals and Infrastructure Pvt (ICTIPL), the group’s flagship company that deals in logistics chain, port operations and cargo generating and handling activities. It owns a container freight station and agri-logistics park at JNPT Port, container terminals at Visakhapatnam, Haldia, Kandla and Paradip ports, and container train operations and an inland container depot at Sonepat in Haryana.

The JM Baxi Group promoters and promoter entities hold a 64% stake in ICTIPL while about 36% is held by another group company Contfreight.

A bunch of private equity and pension money managers had also been interested in investing in ICTRIPL. In February, the Canada Pension Plan Investment Board was negotiating the acquisition of stake in ICTRIPL. However, the deal didn't materialise following the Covid-19 outbreak and the promoters launched the process again, said one person.

Bain Capital spokesperson and Krishna B Kotak, chairman of the JM Baxi Group, declined to comment on the matter. JM Financial runs the formal process for the company to raise capital.

ICTRIPL was incorporated on February 20, 2006, as one of the first private rail operators in India. ICTIPL holds a 99% stake in ICTRIPL. Under a recently approved restructuring plan, the rail operations will be transferred to parent ICTIPL while the internal container depot business will continue with ICTRIPL.

On a consolidated basis, ICTIPL’s revenue stood at Rs 1,397 crore in FY20 and Ebitda was Rs 386 crore.

The JM Baxi Group, founded in 1916, is India's premier shipping services company with a focus on port-based logistics. “The company witnessed healthy upward movement with continued strong performance of the terminal operations at Vishakhapatnam and railway operations of ICTIPL,” ICRA said in a recent report.

Moreover, the healthy realisation levels from rail operations as well as from the Kandla and Paradip international container terminal operations are expected to improve the overall profitability of the group, ICRA said.