Future Supply Chain Solutions Share price and Fundamental Analysis

Company History

Future Supply Chain Solutions Limited (FSC ) is a leading third-party logistics service operator in India and covers the entire gamut of supply chain services across logistics value chain including smart warehousing, an efficient transportation and distribution system, temperature controlled logistics and last mile delivery logistics. FSC operates a pan-India distribution network, offers integrated warehouse management systems with highly automated state-of-the-art technology systems, and hub and spoke transportation model that enable innovative service offerings to the customers in an optimised and cost efficient manner. It caters to corporates in Fashion & Apparels, Food & Beverages, Consumer Electronics & High Tech, Automotive & Engineering, Home & Furniture, Healthcare, General Merchandise and E-Commerce sectors.

As of September 30, 2018, FSC operations are run through 80 distribution centres across India, covering approximately 6.40 million sq. ft. of warehouse space. Its 'hub-and-spoke' distribution model comprising 14 hubs and 129 branches across India, covering 11,559 pin codes across 29 states and 5 union territories. During September 2018, FSC operated 832 containerized vehicles and 116 company owned refrigerated trucks.

The Company is promoted by Future Enterprises Limited, which is promoted by Kishore Biyani. Other entities promoted by Kishore Biyani include Future Retail Limited, Future Consumer Limited and Future Lifestyle Fashions Limited (collectively, the 'Future Entities'). While the business of the company was originally established to provide supply chain and logistics solutions for the Promoter and certain of its Group Companies, it has diversified its customer base across various sectors.

The Company has received a number of industry awards in recent years, including the Best 3PL Company of the Year at the Goa State Logistics, Supply Chain and Warehousing Leadership Awards, 2017, the awards for Best 3PL Company of the Year and for Industry Excellence in Supply Chain - FMCG at the 11th edition of the Express, Logistics and Supply Chain Leadership Awards (Kamikaze), ICC Supply Chain & Logistics Excellence Awards 2017 for 3PL Solutions in 2017, the award for Overall Excellence in Logistics & Supply Chain at the CII-SCALE Awards in 2016, the award for Best Cold Chain 3PL Service Provider of the Year at the Cold Chain Strategy Awards in 2017, 3PL Company of the Year in Retail and FMCG at the 10th edition of the Express, Logistics and Supply Chain Leadership Awards (Kamikaze) and the 3PL Award and the Industrial Retail Warehouse Award at the CII-SCALE Awards in 2015.

Future Supply Chain Solutions Limited was incorporated on March 8, 2006 as Future Logistic Solutions Limited, a public limited company.

The name of the company was changed to Future Supply Chain Solutions Limited on October 23, 2009. The name of the company was changed to convey the range of business solutions offered by the company.

In 2009, the company implemented transport management system to improve visibility in and optimise transportation operations. During the year under review, the company implemented Infor WM 9 Warehouse Management System. During the year under review, SKC 1 Limited (part of Fung Capital) subscribed to 50 lakh compulsorily convertible debentures of the company of the face value of Rs 100 each.

In 2012, the company introduced the Put to Light system which was the first of its kind for consumer industries.

In 2013, the company registered Future Supply Chains as a trademark. During the year under review, the company launched one of the largest and the most highly-automated distribution centre in India at MIHAN, Nagpur.

In 2016, Griffin Partners Limited acquired 40% stake in the company from existing shareholders. During the year under review, the company commenced temperature controlled logistics services.

In 2017, the company set-up a specialised integrated food distribution centre at Kolkata. During the year under review, the company acquired 45% stake in Leanbox Logistics Solutions Pvt. Ltd., which uses technology to enhance last-mile delivery of goods. In July 2017, the company commenced operations of the high speed cross-belt sorter system.

On 28/08/2017 the company filed Draft Red Herring Prospectus and on 30/11/2017 filed Red Herring Prospectus with SEBI for raising Rs. 649.70 cr. The Issue dates were from 06/12/2017 to 08/12/2017 with Price Band of Rs. 660 to Rs. 664. The Issue got subscribed 5.57 times leading to its Issue Price being fixed at Rs. 664. The Shares got listed in BSE and NSE on 18/12/2017 at Rs. 674 which is 1.50% above Issue Price.

On 25 January 2018, Jasper Infotech, which also owns Snapdeal, India's leading value focused e-commerce marketplace, entered into an agreement with Future Supply Chain Solutions to sell 100% stake in Vulcan Express Private Limited in an all-cash deal valued at Rs 35 crore. Vulcan Express, which is focused on e-commerce and high-value business-to-business logistics, is one of the few logistics companies in India that provides end-to-end solutions, including pickup, consolidation, warehousing, intercity movement, last mile delivery, payments collection and reverse logistics. Operating pan-India across 100 cities and 2,000 pincodes, its network is designed to provide GST friendly supply chain solutions, with capabilities sharply focused towards the leading consumption centres in the country. Vulcan Express services the logistics requirements of Snapdeal, Airtel and UPS.

On 2 February 2018, Future Supply Chain Solutions Limited completed the acquisition and purchased 100% share capital of Vulcan Express Private Limited (Vulcan), thereby making Vulcan as wholly owned subsidiary of the company.

On 9 April 2018, Reserve Bank of India (RBI) issued a press release relating to increase in the limits for investment in the equity share capital of the company by Registered Foreign Portfolio Investors (RPFls) including Foreign Institutional Investors (Flis) upto 49% of the paid-up capital of the company.

The Board of Directors of the company at its meeting held on 25 April 2018 approved the Scheme of Arrangement amongst Vulcan Express Private Limited (VEPL) and Future Supply Chain Solutions Limited (FSC) and their respective shareholders and creditors under section 230-232 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 (the Scheme). The Scheme, inter alia, provides for the demerger of Fulfilment Business and Last Mile Delivery Business Undertakings (as defined in the Scheme) of VEPL into the Company. Pursuant to the Scheme, no consideration shall be discharged by FSC since VEPL is a wholly owned subsidiary of the company.

On 27 July 2018, Future Supply Chain Solutions announced that it has signed new clients for its contract logistics business. This includes Haldirams Products Private Limited (a reputed Indian snacks brand), Crompton Greaves Consumer Electricals Limited (an established brand for appliances), Myntra Designs Private Limited (a well-known e-commerce platform, www.myntra.com) and many more. The annualised billing from these newly added accounts is expected to be over Rs 50 crore.

On 14 September 2018, Future Supply Chain Solutions Limited (FSC) announced the signing of an agreement with Voltbek Home Appliances Private Limited (Voltbek). Voltbek is a an equal partnership joint venture between Voltas Limited - India's No. 1 AC Brand and Arcelik, a leading player in home appliances industry and part of the Koc Group - Turkey's largest industrial and services conglomerate. Appointed as its logistics partner, FSC will design and manage a pan-India supply chain strategy for their complete range of consumer electronic products under the brand name Voltas Beko, including refrigerators, washing machines, microwaves and dishwashers. FSC will act as an end-to-end logistics service provider to Voltbek and will cater to the entire warehousing and transportation needs with an aim to improve lead time while optimizing supply chain costs.