Aegis Vopak Terminals Limited is a JV between Aegis Logistics Limited and Vopak India BV. Vopak India is a part of Royal Vopak – world’s leading independent tank storage company with over 400 years of experience. The firm is involved in the provision port handling and storage of liquid and gas products such as LPG, petroleum, chemical and petrochemical products.
Aegis Vopak operates a network of storage tank terminals with a total storage capacity of 1.5 m CBM for liquid products and static capacity of 70,800 MT for LPG. The company’s terminals are situated in five main Indian ports, namely Kandla, Pipavav, New Mangalore, Kochi and Haldia, and are equipped with modern infrastructure. It is the largest third-party operator for LPG and liquid storage products with a capacity tantamount to ~25% of India’s third part storage capacity.
Aegis Vopak’s operations comprise liquid storage and handling, gas storage and handling and throughput arrangements. Many of the world’s leading international, regional and national chemical and energy businesses are its customers. It has established and maintained long relationships, some of which have lasted 20 years or more.
Fresh Issue
The IPO is a fresh issue of up to INR 28,000 m worth of Equity Shares of face value of INR 10 each. The size of the issue is 100% book built, and the price of the shares will be decided on the basis of demand and supply of shares offered by the book-building process.
Offer for Sale
The IPO does not have an OFS. None of the existing shareholders, including promoters are selling their stake in the IPO.
Price Band: INR 223 to INR 235 per share
Book Running Lead Managers (BRLMs) to the issue are:
The principal purposes of the IPO are to employ the net proceeds for paying debt and financing capital expenditures.
The company plans to use INR 20,159.53 million of the net proceeds for repaying certain borrowings.
To use INR 6,713.00 million to fund capital expenditure for acquisition of cryogenic LPG terminal at Mangalore.
The company will use the remaining net proceeds for general corporate purposes, provided that such use shall not exceed 25% of the gross proceeds.
Industry Overview:
History and Origins
Liquefied Petroleum Gas (LPG) is a mixture of hydrocarbon gases including propane (C3H8) and butane (C4H10). The history of the LPG industry can be traced back to the beginning of the 20th century, where LPG was used as a fuel for cooking and heating. Through the years, the industry evolved to become a major player in the energy industry as LPG applications expanded to automotive and domestic cooking.
Industry Trends
With the rising demand for cleaner fuels and government schemes for enhancing the use of LPG as a cooking fuel, the LPG industry has seen a robust growth over the last few years. International Energy Agency (IEA) estimates that the global LPG market will grow at a CAGR (compound annual growth rate) of 4.5% from 2020 to 2025, driven primarily from emerging-market demand.
Aegis Vopak Terminals Limited: A Leading Player in India’s Tank Storage Industry
Origins and History
Aegis Vopak Terminals Limited (AVTL) is the result of a joint venture between Aegis Logistics Limited, an Indian listed conglomerate, and Vopak India BV, a Royal Vopak (Dutch MNC) company. The company was founded to offer tank storage and handling facilities to liquids and LPG gases in India. Its promoters, Aegis Logistics and Royal Vopak have a combined experience of more than 400 years in the storage industry.
AVTL was setup as a result of acquisition of LPG and liquid storage business of Aegis Logistics Limited in the year 2022. The firm also acquired terminals of other players like Friends Group and Nadella Agrotech Private Limited. These acquisitions were strategic in expanding and strengthening AVTL’s position in the Indian tank storage market. The company has since grown to become one of India’s premier third party tank storage providers.
Parent Company Background
Aegis Logistics Limited has a rich history dating back to 1956. The company was initially established as Atul Drug House Limited and underwent many name changes before being rechristened as Aegis Logistics Limited in 2000. Aegis, today, is a leading Oil & Gas, and Chemical logistics company.
Competitive Landscape
The industry is competitive with many large players. Some of the competitors include IndianOil Petronas Private Limited (IPPL), IMC Limited (IMC), and Ganesh Benzoplast Limited (GBL).
Competitors at a Glance
Competitive Positioning
AVTL has the largest third-party owned and operated liquid storage terminal network of LPG and liquid terminals across in India and has a diverse portfolio of terminals strategically located along the west and east coast of India at five ports in operation. IPPL and IMC are close competitors and offer similar services. However, the company’s strategic location and infrastructure give it a competitive edge.
Company Strengths
The company offers a strong presence in the Independent tank storage terminal market in India and a well-diversified network of terminals across five major ports on the west and east coast of India. Being able to do this at scale is what gives the company an edge when addressing a diverse set of customers.
Company Weaknesses
Despite its significant strengths, the company is not diversified in its revenue sources. Unlike some of its competitors, the company does not have a presence in dry cargo terminals or in operations and maintenance.
Financial Profile
The firm has seen revenues and profits rise materially, with total income and re-restated profit for the year showing smart growth.
Revenue Growth
Revenue from operations has increased significantly due to organic growth, the acquisition of more terminals as well as an increase in other operating revenue. By growing its capacity and infrastructure at its existing ports and commissioning new terminals, the company has been able to take advantage of economies of scale and leverage synergies with its existing facilities.
Profit Growth
The increase in turnover has translated into an increase in profits also. In addition, the increase in the profits is the result of good control of costs and efficiency improvement. Other income which includes interest income from fixed deposits and other income also added to the profit up tick.
Drivers of Revenue Growth
Higher LPG throughput volumes and the purchase of more terminals have driven revenue growth. The company’s value-added services too have allowed it to boost the revenue.
Figure: Financial Snapshot
(in INR million) | Period Ending Mar 31, 2022 | Period Ending Mar 31, 2023 | Period Ending Mar 31, 2024 | Period Ending Dec 31, 2023 | Period Ending Dec 31, 2024 |
Revenue from operations | – | 3533.32 | 5617.61 | 3754.19 | 4641.81 |
PBT | -10.92 | 25.97 | 1210.18 | 473.65 | 1139.9 |
PAT | -10.92 | -0.75 | 865.44 | 337.02 | 858.91 |
Source: RHP
Figure: Comparison of Select Metrics Vs Peers (FY24)
Metric | AVTL | Adani Ports and Special Economic Zone Limited | JSW Infrastructure Limited |
Revenue from Operations (₹ million) | 5617.61 | 267105.6 | 37628.9 |
EBIT (₹ million) | 2919.06 | 133131.9 | 17974.9 |
Operating EBITDA (₹ million) | 3975.37 | 158639.2 | 19645.6 |
Net Worth (₹ million) | 11519.42 | 540432.5 | 81710.3 |
Total Debt (₹ million) | 25864.17 | 462792.3 | 43806.8 |
Total Debt to Equity (times) | 2.59 | 0.85 | 0.53 |
Source: RHP
Figure: Comparison of Select Metrics Vs Peers (FY 24)
Metric | AVTL | Adani Ports and Special Economic Zone Limited | JSW Infrastructure Limited |
Static Capacity for Liquid Terminal Division (CBM) | 1,497,483 | N.A. | N.A. |
Capacity Utilization % for Liquid Terminal Division | 75.81% | N.A. | N.A. |
Static Capacity for Gas Terminal Division (MT) | 70,800 | N.A. | N.A. |
Throughput for Gas Terminal Division (MT) | 1,588,727 | N.A. | N.A. |
Revenue Growth YoY (%) | 58.99% | 28.10% | 17.78% |
Operating EBITDA Margin (%) | 70.77% | 59.39% | 52.21% |
PAT Margin (%) | 15.18% | 28.73% | 28.78% |
Source: RHP
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